The US dollar is weaker after Fed Chairman confirms US economy faces headwinds
Peter Compton " | July 10, 2019
The US dollar gave back some of the gains since last Friday’s stronger than expected jobs report after Powell says US economic growth has become more uncertain since June. The Canadian dollar is stronger after oil prices shoot higher and markets await Bank of Canada decision later today.
July 10, 2019
EUR/USD 1.1249 GBP/USD 1.2510 USD/CAD 1.3074 AUD/USD 0.6956 USD/JPY 108.62 USD/CNH 6.8790 USD/ILS 3.5620 USD/MXN 19.2753 USD/CHF 0.9900 USD/INR 68.5713
The Fed’s Jerome Powell speaks before Congress today and tomorrow and will face questions from legislators. A prepared remarks statement was released this morning in which Powell says the US economy has faced increased uncertainty since the June FOMC meeting. The dollar weakened immediately as prospects of a rate cut at the July 31 FOMC meeting increase.
US-China trade talks appear to have resumed positively, with Larry Kudlow saying negotiators had “constructive” conversations.GBP
The pound rebounded from two-year lows overnight after Conservative candidates Jeremy Hunt and Boris Johnson debated their approaches to Brexit. Johnson refused to rule out the prospect of suspending Parliament in an effort to deliver Brexit on time should he become prime minister. The House of Commons backed a proposal aimed at preventing the next prime minister from pushing through a no-deal Brexit. Industrial and manufacturing production data was mixed leaving doubts about the UK economy.EUR
The euro strengthened overnight after French industrial production data came in much better than expected. The euro spiked higher after the US Fed Chair's dovish comments in testimony to a congressional finance committee.CAD
The loonie is stronger on higher oil prices and the Fed Chair's dovish comments. Oil inventories in the US sunk further than expected causing near term oil futures to spike higher. Bank of Canada meets later today with markets expecting no change to current monetary policy or rates.ASIA/PACIFIC
The Aussie dollar has fallen 15% since January 2018 in what has been a steady downtrend. Higher iron ore and gold prices are giving traders hope the A-dollar will break out of weakening trend.
Japan’s yen had slipped to a five week low against the dollar prior to the dovish Fed Chair statement.