The dollar is up as investors take profits after China manufacturing data disappoints and US income data soars

The dollar is up as investors take profits after China manufacturing data disappoints and US income data soars

After gaining 5% in April, the S&P 500 looks set for profit taking as investors close out the month. The dollar, which has been selling off during this risk-on month, has rallied overnight. Investors have plowed money into risk assets and sold the dollar this month on expectations of a strong global economic recovery. Overnight Chinese PMI data for April came in weaker than expected and investors sold equities and bought dollars. Personal income growth hits an all-time high in the US.

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  • FX Rates
    April 30, 2021

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  • USD

    The dollar is stronger after a week of losses after Chinese manufacturing data missed estimates. Personal Income grew 21% in March as stimulus checks hit individuals' bank accounts. Inflation data came in as expected with the March PCE Core Deflator at 1.8% YoY.

    The University of Michigan Consumer Sentiment index for April will be released later this morning.


    The pound sank on overall dollar strength. It seems the pound has dipped as investors prepare for next week’s Bank of England meeting. Market participants are divided over whether policy makers will taper bond purchases or wait until later.


    The euro lost ground on overall dollar strength. A Q1 GDP reading for Germany, Italy and Spain showed economic contraction highlighting the persistent effects of Covid lockdowns. By contrast, the US grew by 6.4% in the same period and China grew 18%. Granted these figures are skewed due to prior year pandemic shutdowns.


    The Canadian dollar strengthened despite lower than expected Chinese manufacturing data which led to a broad sell-off in equities and other risk assets at month end.


    Chinese manufacturing PMI slipped to 51.5 missing consensus whilst the non-manufacturing gauge also dropped to 54.9. A reading above 50 represents growth.

    The Japanese yen strengthened on safe haven buying. Japanese markets will be closed Monday through Wednesday next week for the Golden Week holiday.

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Peter Compton
Peter Compton

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