The U.S. Dollar is trading mixed ranges as markets return to full throttle following the return of global activity after the observation of Easter holidays
Overview
The main concern across market classes is the potential for turbulence in the financial system if Federal Reserve Jerome Powell is somehow removed from his position. The White House is hoping to have more influence on monetary policy and differ in view with officials about the current state of interest rates. Investors and traders worry that interfering with Fed independence makes for a very shaky financial environment that would feel unstable and vulnerable to political headwinds.
On the trade front, there are reports of “significant progress” in talks between the U.S. and India, trying to have a bilateral free trade agreement. The world’s most populous country would like a chance to be the alternative to doing business directly with China in various items, and do away with tariffs on American products that have been highly criticized. This could bode well for equities around exchanges that are looking for a break anywhere. Data-wise, we have Purchasing Managers Index figures out tomorrow, followed by Durable Goods Orders on Thursday, and consumer Sentiment on Friday.
What to Watch This Week…
- PMIs globally on Wednesday
- University of Michigan Consumer Sentiment on Friday
- Monex USA Online is always open
The complete Economic Calendar can be found here.
MXN ⇑
The Mexican Peso continues to swing up and down and is now improving against the dollar as markets continue to have jitters about consistent U.S. policy. The Fed will remain a main feature of all headlines as well as talks about mitigating the long-term damage that tariffs and changes to free-trade pacts could have. Mexico is trying to cooperate and uphold the USMCA where it can. Economically, things have slowed down in Mexico, but we shall see if resilience keeps Peso elevated as there is de-dollarization playing out in markets.
EUR ⇓
The Euro has been declining this morning, coming down from having hit its highest value against the Buck since November 2021. As Europeans get back to action following their days off, there will be more FX liquidity as well as volatility in equities, with Tesla earnings being the most awaited item in the mix. Attention will be paid to pharmaceuticals, which have also come under the radar with recent tariff hikes aimed at medicine. PMIs tomorrow will be key to seeing if reading can remain optimistic about the survey. The expectation is for a slightly positive composite reading, aided by Services.
