The U.S. Dollar is trading in stronger ranges, recuperating from being down to its weakest point overall since July 2023.
Overview
Markets are still seeking guidance and direction as plenty of developments are happening quickly, while making many economists question the potential for damage down the line. The Organization for Economic Cooperation and Development seems to agree after cutting its forecast for global growth, the second time it has done so this year.
As far as analysts are concerned, there have not been any major breakthroughs in supporting global trade despite periods of relief when implementation of proposed tariffs have been delayed. Once more, the U.S. announced it would delay some tariffs on Chinese goods until August 31st, fomenting further confusion about where things are headed as the White House looks to have a direct call with China’s President Xi Jinping.
There will be April data out later today at 10 AM in the form of Durable Goods Orders, factory Orders, and JOLTS Job Openings. All figures are expected to signal a bit of softening in the economy, with contractions estimated for Orders, while these could be the fewest jobs available since 2020. Expect more volatility as we roll with a plethora of headlines trying to shape a consistent narrative on budget, trade, and risk.
What to Watch This Week…
- US Nonfarm Payrolls, Friday 8:30 AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇑
The Euro dropped almost as quickly as it jumped yesterday to open the week and reach its strongest level over the Buck since mid-April. The lack of consistency is due to the belief that the global economy could indeed start feeling the impact of a world in which businesses are getting accustomed to changes in trade, ultimately resulting in much higher costs. Consumption in the U.S. and Europe is a concern as the anxiety over labor and growth increases with the likelihood of painful adjustments to less free trade. Inflation remains tamed, however, as numbers from the Consumer Price Index showed earlier.
Additionally, there is growing political pressure over the European Union as Poland held elections to choose a less continentally oriented candidate who is questioning certain aspects of EU membership and alliance. This comes at a time when Hungary and Slovakia are also challenging the EU’s way of handling things such as the Ukraine-Russia war. On Thursday, we will hear about monetary issues as the European Central Bank announces its decision. A 25 basis-point cut is expected, which could weigh on the Euro, perhaps.
MXN ⇓
The Mexican Peso is trading tightly this morning but could see more action in the next few days as data covering consumption and investment are scheduled. Although there were some worries about the election for judges, it seems like the FX world shrugged the whole thing off. For now, there will be close attention to what type of picture indicators can paint for the economy and if a 50bps cut is necessary when Banxico central bankers gather for the policy decision on June 26th.
