Markets await FOMC statement and press conference this afternoon
The dollar index is modestly higher this morning as financial markets await this afternoon’s FOMC meeting results as well as a speech this evening from President Joe Biden on taxes and additional social spending. Commodity currencies continue to do well. The pound is weaker as the Brexit saga officially ends and while Boris Johnston remains under scrutiny for unlawful campaign donations in the form of payments for personal apartment renovations.
April 28, 2021
EUR/USD 1.2066 GBP/USD 1.3886 USD/CAD 1.2394 AUD/USD 0.7746 USD/JPY 108.92 USD/CNH 6.4840 USD/ILS 3.2548 USD/MXN 20.0143 USD/CHF 0.9154 USD/INR 74.365 USD/BRL 5.4109 USD/SGD 1.3262 USD/DKK 6.1625 USD/SEK 8.3807 USD/NOK 8.2583
Financial markets favored the dollar while awaiting today’s FOMC meeting results. The Biden administration released some details regarding a $1.8B 10-year “American Families Plan” which President Biden will talk about tonight during a prime time speech. The 10yr Treasury yield ticked up a few basis points as financial markets digest yet another massive spending initiative from Biden. The 10yr yield is now at 1.63% up from 1.53% and on its 6th consecutive day of gains.GBP
The pound fell vs. the dollar as FX markets await the Fed. Brexit officially ended when European Union lawmakers gave their approval for the trade accord with the UK which was negotiated at the 11th hour last December. The UK has yet to fully implement custom controls between Great Britain and Northern Ireland - a politically sensitive measure inside the UK which is now drawing the ire of the European Commission.EUR
The euro is flat vs. the US dollar this morning after consumer confidence for April in France beat expectations, but the same measure for Germany failed to meet forecasts. European bonds and the euro have both ticked lower ahead of FOMC comments today.CAD
The Canadian dollar strengthened again this morning as commodity currencies continue to lead. The return of global economic growth, especially in the US and China, is expected to lead to large increases in exports for Canada – mainly oil and cars. Also, an acute shortage of lumber in the US, specifically for home building and repair, could be met by increased Canadian imports.ASIA/PACIFIC
The Australian dollar fell slightly against the greenback as weaker than expected inflation data boosted expectations that monetary policy will not return to normal any time soon. The Aussie dollar has mostly traded between 0.76 and 0.78 in 2021.
China’s renminbi is flat vs. the dollar after credit concerns were alleviated when the nation’s largest state-owned bank helped Huarong Asset Management repay bond holders.
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