The U.S. Dollar is trading in weaker ranges today after numbers from China helped in carrying the narrative for a globe economically flourishing by the second half of the year.
Overview
Q1 Chinese Gross Domestic Product came out at 4.5% vs. the expected 4.0% year-on-year figure. Additionally, better-than-forecast consumer spending helped rally European equities during their trading session.An overall boost in global risk, regardless of some negative outlooks and the ongoing battle against inflation, has managed to keep the buck down throughout April and things may not turn around unless the Fed continues to hike interest rates throughout the remainder of the year. Currently, there’s growing bets on the Fed stopping their rate increments prior to Q4.A mix of global growth optimism and banking concerns are driving market activity while the debate remains over how likely it is for recessionary pressures to still materialize. While conflict and political realignment also take place, the globe wants to believe there is advancement to be had, and it is not favoring the buck.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
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EUR ⇑
The Euro is up after erasing some of the gains it experienced last week after China’s positivity translated into a flourishing session for the Stoxx 600. Euro movement could get wild tomorrow as we get the release of Consumer Price Index figures for March, which are expected to advanced 0.9% for the month. While mentioning China, it is worth noting that France’s President Emmanuel Macron is hoping to get China to convince Russia to get to a negotiation table with Ukraine while both he and China’s leader Xi Jinping work as mediators. As we have highlighted before, any progress in resolving the armed invasion will bode poorly for the greenback.
GBP ⇑
Pound Sterling is improving following further evidence for the Bank of England to maintain their tightening cycle. Average Weekly Earning 3M/YoY climbed by 5.9% when only 5.1% was estimated. As the U.K. economy faces inflationary pressures, the BOE will continue hiking, but strikes in various sectors, such as health workers, could make officials rethink. It will be interesting if, despite progress by Rishi Sunak, a Prime Minister that has been successful with some difficult tasks such as the Northern Ireland protocol, political pressure mounts from social dissatisfaction that pushes for new elections. For now, the depreciating bias Sterling had carried through the pandemic has faded.
