The U.S. Dollar is trading in mixed ranges once again. The narrative regarding tariffs on China has shifted a bit after comments from White House officials that give hope of easing tensions.
Overview
Additionally, U.S. President Donald Trump expressed that he has no intention to look for ways to have Federal Reserve Chairman Jerome Powell ousted from his post, while also echoing Treasury Secretary Scott Bessent on wanting to improve the state of affairs with China. Following the announcement of levies of up to 145.0%, the Chinese have countered with retaliatory measures of their own that are making for headaches across trading floors with pessimistic outlooks for the global economy.
Yesterday’s equity rally is likely to continue as the mood overall feels more positive following the evening’s change of rhetoric. Although volatility remains, the Buck overall is not necessarily getting away from its weakest levels since December 2023 according to the Blomberg Dollar Spot Index. Later at 9:45AM we will get a chance to se the feeling across Purchasing Managers with the Index detailing if businesses still see room for expansion with all the havoc thus far this year.
What to Watch This Week…
- U.S. Durable Goods Orders on Thursday
- 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 remains around its best levels since mid-October of last year as the good news out of the U.S. seems to correlate with MXN appreciation. While there is friction in talking to other countries, the U.S. has found it easy to deal with Mexico with the thirst for tariffs seeming to be dying off, there is a hope that the Mexican economy will be able to handle some changes to trade. Although the International Monetary Fund warned on its latest forecast that the world may be headed for a slowdown, Peso has been a source of yield as investors look for alternatives to other safe-haven assets.
EUR ⇓
The Euro is slowing down its roll after having hit its strongest level since November 2021. Data certainly played a role this time in cutting the shared currency’s momentum with PMI readings for April showing that the Euro-zone is feeling contractionary pressures with Services falling below the expected 50.5 at 49.7. The Composite came out just slightly above 50, but only because there were silver linings in conversations with Manufacturers that helped it. Another factor likely to keep downward pressure on the currency is statements from German Bundesbank Chief Joachim Nagel that he cannot exclude a recession for the EU’s largest economy in 2025.
