The dollar rose to its best level in a month against the euro
Laurence Hayward | July 25, 2019
The markets were focused on today’s ECB meeting. In the UK, the new PM Boris Johnson has started picking his new cabinet. The dollar remains near two-month highs and trade talks with China are set to resume next week.
July 25, 2019
EUR/USD 1.1174 GBP/USD 1.2491 USD/CAD 1.3149 AUD/USD 0.6954 USD/JPY 108.44 USD/CNH 6.8741 USD/ILS 3.5251 USD/MXN 19.1084 USD/CHF 0.9881 USD/INR 69.0413
The dollar index rose to its highest level since the end of May. Trade talks with China are set to resume on July 30th in Shanghai. Treasury Secretary Steve Mnuchin stated he does not support a weak dollar policy. President Trump said House Republicans should support the proposed two-year budget agreement that will be voted on today.GBP
With Boris Johnson as the new Prime Minister, 18 of the 29 cabinet ministers were sacked. Replacements are likely to be pro-Brexit. Sajid Javid will be the new Chancellor of the Exchequer (Treasury Secretary) and Priti Patel will be Home Secretary. Look for the focus to return to developments with Brexit after the new cabinet is in place. Boris Johnson was one of the prime Brexiteers, so the odds of a hard exit have risen. The pound is weakening above the 1.2400 support.EUR
Mario Draghi, head of the European Central Bank, said the economic slowdown has most negatively affected manufacturing but it is spreading through other areas. He added, “At the same time, the euro area services and construction sectors are resilient”. The prospect of more monetary stimulus after the summer is almost certain with one or more 25 basis point cuts this year. German IFO Business Climate, Expectations and Current Assessment all fell. Draghi also said the ECB does not target exchange rates. The euro rose on the news.CADThe Canadian dollar is tracking sideways inside yesterday’s range. The CFIB Business Barometer fell to 57.8 from 61.5 in July. The CAD has lost a cent against the USD this week.ASIA/PACIFICNorth Korea heightened geopolitical tensions by firing off two missiles that landed in the sea. The actions did not upset the area stocks which ended higher following yesterday’s trend.