The U.S. Dollar is closing out an eventful week about 1.0% weaker against a basket of major peers according to the Bloomberg Dollar Spot Index.
Overview
Breakthroughs in talks with China resulted in agreeing to cooperate and lowering tariffs, while the U.S. President was visiting Middle Eastern countries that signed investment deals that are projected to bring billions into America.
The equity markets managed to erase losses experienced in the most turbulent of weeks prior to this one, in which in a big swoop, trade got a major relief, and outlooks started to seem irrationally gloomy. While there are still concerns about the future of the U.S. economy following Q1’s contraction, the mood seemed to shift throughout the last few days.
The S&P is likely to have its best week of the year while some traders and investors wonder if hard data for these months will show later a major slowdown. The Federal Reserve has referred to the economy as not problematic and balanced, but some wonder if figures could make policymakers consider cutting into interest rates once or twice this year. As far as other commodities go, gold fell, and oil prices looked to weaken after a statement from Iran’s foreign minister fomenting uncertainty that nuclear talks with the U.S. will be fruitful.
What to Watch This Week…
- University of Michigan Consumer Sentiment 10AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇑
The Euro is hoping to squeeze a gain, potentially 1.0% against the Buck, as the shared currency is recovering this week from a major slide after reaching a zenith not seen since 2021. The lack of faith in the U.S. Dollar helped Euro resurge unlike anyone expected. Nations within the European Union are hoping to spend more after decades of playing it safe to avoid financial turmoil that arrived regardless of consciousness via COVID and the tough comeback. Although tariffs have added to concern that friction will only keep economic progress stalled, a push to expand defense expenditures has also been welcome news for investors.
JPY ⇑
The Japanese Yen has been the best performer amongst the Majors this week, but trouble could be ahead for the safe-haven asset. While it has appreciated by about 2.0% thus far, overnight the news for Japan a Gross Domestic Product readings disappointed. Q1 revealed a (-0.2%) contraction, its first struggle of the year. Some analysts worry that these numbers come from before the tariff anxiety so Japan could have room for further deterioration, especially considering the week-to-week lack of guidance. “Stagflation” is now a problem to cope with since trade issues may only worsen prices for large as well as common items.
