US dollar tests key support levels as optimism overcomes inflation concerns
The dollar is weaker with the Bloomberg dollar index (BBDXY) hovering just above the lows of January and the lows of 2018. A fall below these crucial levels could see the dollar accelerate declines. Much of the European continent is closed today for Whit Monday. Commodity currencies such as the Canadian dollar continue to do well on strong demand outlook as the global economy grows following the pandemic.
Economic Data for this Week:
Tuesday: New Home Sales for April; Conference Board Consumer Confidence for May
Thursday: Durable Goods orders for April, Weekly Jobless Claims
Friday: PCE Deflator for April, Wholesale and Retail Inventories for April, Univ. of Mich. Sentiment for May
May 24, 2021
EUR/USD 1.2225 GBP/USD 1.4167 USD/CAD 1.2051 AUD/USD 0.7751 USD/JPY 108.79 USD/CNH 6.4173 USD/ILS 3.2529 USD/MXN 19.8922 USD/CHF 0.8961 USD/INR 72.9725 USD/BRL 5.3227 USD/SGD 1.3286 USD/DKK 6.0839 USD/SEK 8.3221 USD/NOK 8.3463
The dollar is weaker to start this last week of May after Republicans rejected President Biden’s proposed infrastructure package over the weekend. Biden had lowered the spending from $2.25T to $1.7T in part to gain some bi-partisan support.GBP
The pound is stronger this morning on overall dollar weakness and after the Confederation of British Industry (CBI) proposed a GBP 700B economic plan for the government to incentivize innovation and investment.EUR
The euro is stronger this morning on overall dollar weakness with most of continental Europe on holiday today. With no economic activity, the euro rebounded from losses late last week as investors turned optimistic after Markit Composite PMI for the eurozone beat expectations.CAD
The Canadian dollar is stronger this morning on an increase in the price of oil. FX and oil traders see the supply and demand of oil steadily increasing to meet great economic activity as pandemic related restrictions loosen around the world. The loonie is trading at its strongest levels since 2015.ASIA/PACIFIC
Chinese renminbi is stronger overnight after comments by China’s central bank stressing the currency will be stable despite increasing inflationary pressures. China authorities warned industrial metals producers in the country to refrain from price gouging.
The Australian dollar was left out of a commodity currency rally as China’s warning on metals prices hit the price of iron ore.
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