After a week of strength, the United States Dollar is trading weaker against all its G10 peers this morning as risk sentiment rebounds around the world
Overview
The Buck, though, is still set to post a weekly net advance across the board, currently 0.5% stronger than at Monday morning’s open. With a thin data calendar for the last day of the week, leveraged traders are mostly sidelined after taking profit overnight and real-money flows are dominant today.
Trump and the Federal Reserve Chair Jerome Powell’s tiff continues to dominate market narratives, with Trump hitting further overnight – calling his own appointment of Powell in 2017 “one of [his] worst” and saying the US “deserves” to be at 1% interest rates. Powell, for his part, rebutted the Administration’s criticism over the increased costs of the renovation of the Fed’s Washington DC headquarters, saying he did not inform the government of plan changes on this project because they were not “substantial” enough to merit it. The Fed is highly unlikely to cut interest rates at its July 30th decision, with the lone vocal dissent coming from Christopher Waller, who would be a front-runner for the Chair job once Powell is out – either when his term expires or should Trump fire him early. Waller has long leaned dovish and expressed his support for 3 cuts this year, and market odds are currently pricing in just shy of two. The first reading of Q2 GDP is due out the morning of that next rate decision from the Fed, leaving the door open for a further round of criticism from the Administration.
Some second-tier data released this morning did continue to ring positive, continuing the week’s streak. Housing starts grew by 4.6% in June, showing substantial growth from last month’s wildly negative of -9.7%. University of Michigan Consumer Sentiment for July is also due out at 10AM.
What to Watch This Week…
- U. of Michigan Consumer Sentiment, Friday 10AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇑
The single currency is gaining back ground this morning to end the week close to where it began, currently trading half a percent stronger against the Buck from yesterday’s close. With little in the way of hard economic data from either region of the EURUSD pair, corporate and real-money flows are dominating price action. Positive murmers on a potential European Union – US trade deal are keeping a floor under EUR, which failed to break below a key resistance level earlier this week amidst broad Dollar positivity.
JPY ⇓
Japanese Yen, though still trading in slightly positive territory against USD this morning, is underperforming the rest of its G10 peers and is set to close the week a good bit weaker than at Monday’s open. Traders are hesitant to take a strong position on USDJPY ahead of Japan’s upper-house elections over the weekend leading into a public holiday Monday. Should current prime minister Ishiba’s LDP party fail to keep its majority, there is a risk that he could be ousted and USDJPY could gap substantially weaker at the Asian open Sunday afternoon.
