The greenback bounced back after the NY Fed withdraws dovish comments
Kathryn Garvey | July 19, 2019
Fed comments yesterday that sent the dollar weaker were withdrawn, which pared some of the dollar’s losses. The UK is expected to have clarity on Brexit come next week as Tory leadership will be finalized on Tuesday. The eurozone turns its attention to the ECB meeting next week in which rates may be cut.
July 19, 2019
EUR/USD 1.1232 GBP/USD 1.2529 USD/CAD 1.3074 AUD/USD 0.7061 USD/JPY 107.67 USD/CNH 6.8832 USD/ILS 3.5384 USD/MXN 19.0070 USD/CHF 0.9814 USD/INR 68.8075
The greenback is stronger this morning, boosted by positive signs out of US-China trade talks and a clarification from the New York Fed that Fed President John William’s comments that sent the dollar lower yesterday, were in the context of academic research and not about upcoming actions. Investors have priced in a 35% chance of a 50 basis point rate cut. University of Michigan Sentiment is due out this morning.GBPThe pound slid slightly this morning on a wider budget deficit and the stronger dollar. The Brexit saga continues next week when either Jeremy Hunt or Boris Johnson will be elected Prime Minister. Results are due on Tuesday.EURThe euro dropped versus a rebounding US dollar as investor attention turns to a potential ECB rate cut next week. Markets are pricing in a 45% chance of a 10 bp cut. German Producer Prices were lower than expected coming in at -0.4% actual versus -0.1% expected.CADThe Canadian dollar fell from its 8-month high this morning after Retail Sales slid 0.1% in May versus a 0.3% gain expected. The currency also fell after the New York Fed walked back dovish comments made by John Williams, the bank’s president.ASIA/PACIFIC
The PBOC injected 100 billion yuan ($14.5 billion) into the financial system to boost liquidity after corporate tax payment season.
The New Zealand dollar rallied over 1% to six-week highs, as markets reacted to Fed rate cuts which enhanced the attractiveness of high interest rates in New Zealand.