Dollar slightly lower, focus is on CB meetings, UK election, China tariffs
Scott Petruska, CFA " | December 9, 2019
The US dollar index is slightly lower from Friday’s close as traders are faced with a busy week. The Fed, ECB and Swiss National Bank all meet, and expectations are for no change in their respective benchmark rates. Other CB meetings include Brazil, Turkey, and Russia - all are expected to cut rates. Thursday’s UK election is widely expected to be won by Boris Johnson of the Conservative Party. US tariffs on $156 billion of Chinese imports go into effect on December 15, but are expected to be postponed.
Wednesday: US Consumer Price Index (Nov), FOMC announcement and Fed Chairman Powell press conference
Thursday: US Produce Price Index (Nov), ECB announcement and ECB President Lagarde statement, Swiss National Bank announcement including press conference, Bank of Canada Governor Poloz speaks
Friday: US Retail Sales (Nov)
December 9, 2019
EUR/USD 1.1075 GBP/USD 1.3151 USD/CAD 1.3253 AUD/USD 0.6826 USD/JPY 108.48 USD/CNH 7.0380 USD/ILS 3.4715 USD/MXN 19.2845 USD/CHF 0.9894 USD/INR 71.05
The dollar moved slightly lower, giving back some of Friday’s gains made after the unexpectedly large Nonfarm Payroll number. The Fed has their last policy meeting of the year this week. No change in rates is expected, and we will get a new ‘dot plot’, policy statement, economic projections and a press conference.GBP
The UK is set for a general election on Thursday. Boris Johnson is expected to retain power for the next four years, and guide the UK’s departure from the EU. He is looking to regain his majority in the 650-seat Parliament to push through his Withdrawal Agreement due on January 31, and then his trade deal with the EU by year-end. Nervous traders managed to push the UK pound higher this morning, but then it gave back most of those gains, and it now trades near Friday’s close around $1.3150.EURThe European Central Bank meets on Thursday. Traders will scrutinize President Christine Lagarde's first official statement for clues of her long-term approach to monetary policy. The euro rallied this morning, but remains under $1.1100.CAD
The Canadian dollar is unchanged from Friday’s close, as traders await this week’s big events. On Thursday, Bank of Canada Governor Stephen Poloz speaks, and traders expect an upbeat assessment of Canada’s economic growth. According to the latest CFTC report, large currency speculators are positioned long the loonie.ASIA/PACIFIC
The dollar firmed against the Chinese yuan, as the December 15 US-China trade deal deadline looms large. Tariffs are scheduled to go into effect if no deal is reached, although an extension by Trump is expected.
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