US economy receives more indications of strength confirming the dollar rally still intact
Despite being down 2% in Q4, the US dollar is up 6.5% since April 2018. Continuous strong economic data out of the US leaves FX markets believing the rally will continue. The British pound is stronger today on Brexit concerns and the Canadian dollar fell on weak retail sales. Trading is light going into the Holiday week.
“Order and simplification are the first steps toward the mastery of a subject.”
December 20, 2019
EUR/USD 1.1087 GBP/USD 1.3048 USD/CAD 1.3161 AUD/USD 0.6899 USD/JPY 109.37 USD/CNH 7.0031 USD/ILS 3.4767 USD/MXN 18.9208 USD/CHF 0.9813 USD/INR 71.1440
The final reading for Q3 GDP (+2.1%) was in-line with expectations but Personal Consumption was higher at 3.2%. The dollar, already stronger vs. the euro and Canadian dollar, shot even higher on the economic data. More data expected later this morning on inflation for November and University of Michigan Sentiment survey.GBP
The British pound is stronger today in volatile trading after significant losses yesterday afternoon. The pound is down 3.4% vs. the dollar since the euphoria of Boris Johnson's election on December 12. UK Parliament is now back in session with the priority of passing the EU withdrawal agreement. The agreement contains a provision that the UK will leave the EU by December 31, 2020 if there is a new trade agreement in place or not. Passage is not expected until January.EUR
The euro weakened after economic data across the eurozone failed to show much strength.CAD
The Canadian dollar is weaker this morning after Retail Sales for October (-1.2%) came in weaker than expected (+0.5%). Year-over-year retail sales fell -0.6%. The one bright spot was cannabis sales which grew 4.9%.ASIA/PACIFIC
The Indian rupee seems to have entered a trading range of between 70.50 and 72.50 since August 5. The currency is weaker today despite strong foreign investment inflows, especially into the Indian equity market. The Australian dollar continues to struggle to snap a bearish trend which began in early 2018 at 0.80 USD to an Aussie dollar. Since the low of 0.6699 on October 2 the A-dollar has rallied 2.75% to 0.6897. Market participants are concerned about the Australian economy.