The United States Dollar starts the morning and the week slightly on the front foot after taking heavy losses last Monday through Thursday.
Overview
The buck advanced against most of the G10 board as expectations of rate cuts from the Federal Reserve toward the end of the year declined. Friday afternoon Fed Governor Christopher Waller said he favored more monetary policy tightening for longer, easing pressure on USD brought on by data pointing to a cooling economy. Waller stressed that persistently high inflation needs to remain the Fed’s main focus and financial conditions have not tightened significantly enough to warrant a change in the Fed’s path forward just yet.Markets are now betting that the Fed will cut rates by roughly 55 basis points by the end of this year, a marked decline from this time last week. The dollar spot index (DXY) has rebounded as well. With little in the way of hard data released over the last few days, sentiment and speeches are driving price action this morning. Over the next week, we look to housing and production data for dollar direction.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
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EUR ⇑
The single currency Friday and into this morning began to rebound off the annual highs seen during Thursday’s trading session, falling nearly a percent against USD since Friday’s open. After speeches from various voting members of the European Central Bank, current market bets are split between a 25 and 50 basis point hike at the ECB’s next meeting in May. Inflation still remains at the forefront of policy decisions and the ECB will likely maintain its current restrictive territory.
JPN ⇓
The Japanese Yen fell against the Buck this morning as both geopolitical tensions in the region and global risk sentiment drove price action. Over the weekend a failed assassination attempt targeting Prime Minister Fumio Kishida showed just how bad tensions within the island nation are and place the spotlight back onto domestic politics rather than Kishida’s foreign successes. Signs point to a potential snap election earlier than usual as Kishida attempts to win re-election before any further discontent rears its head.
