The U.S. Dollar is trading in mostly familiar ranges following a holiday in the U.S. and a few developments throughout global trading sessions.
Overview
There is renewed enthusiasm across risk markets that central banks, eventually down the line the Fed, will continue to be stimulus-driven. This has been solidified by the Swiss National Bank’s decision earlier to cut its benchmark interest rate for the second time in a row.
Additionally, reports from China indicate that there are plans for reshaping the way the People’s Bank of China finances its operations and offering sovereign bonds. It is yet another item that promotes the concept of China trying to recover global influence. Russia’s leader Vladimir Putin visited the country as well as North Korea to strengthen the alliance after European parliamentary as well as American congressional approval for further help towards the war effort in Ukraine.
Domestic data showed that Jobless Claims came in as expected while new home construction in May was the slowest in four years. Thus far, it has now affected the Buck’s initial upward trend. Tomorrow will close with some productivity gauges out of Europe as well as more Housing from the U.S.
What to Watch Today…
- JUNETEENTH DAY – Wednesday – Monex USA Closed
- Bank of England Thursday
- Monex USA Online is always open.
GBP ⇓
Sterling is falling in value after the Bank of England’s decision and statement in which interest rates were kept unchanged. Although this was expected, chances for cuts to arrive as soon as August climbed based on the belief that economic activity will need it for stimulus soon.
In general, the U.S. economy remains better off than most other regions and with the chances that they will need to exercise loose policy sooner than the Fed, the Buck is enjoying a resurgence in value.
MXN ⇑
The Mexican Peso climbed by 1.2% in the past two days after data showed the economy’s fundamentals are holding up regardless of political anxiety. Thus far this month, MXN has dropped by 3.2% as global reaction to elections has been met with skepticism about the steadiness of the country. A measure of Aggregate Demand and Private Investment for Q1 revealed a better situation than expected with growth of 2.6% vs. 2.2%. Banxico will meet on June 27th and possibly withhold from cutting rates further, something that can once again be a catalyst for MXN appreciation.
