The U.S. Dollar continued its positive momentum from last week in early trading today.
Overview
The Bloomberg Spot Dollar Index is up 0.2%, adding to its 2.1% gains last week. The dollar is currently at a five-week high. The greenback found favor last week as Federal Reserve officials maintained their promise to continue to raise rates even as some inflation readings indicate price pressures may have peaked. As a result, equities have stumbled, and the safe-haven greenback has rallied. The Fed will continue to hold center stage this week. Fed Chairman Jerome Powell will speak at the Jackson Hole symposium on Friday. He is likely to echo his fellow policymakers and hold a slightly hawkish tone. However, any dovish posturing could send equities into rally mode and cause the greenback to stumble.In the meantime, there is no major economic data slated for release today. New home sales and S&P PMIs are due out tomorrow. U.S. durable goods and pending home sales will cross the wire on Wednesday. US GDP is out on Thursday, followed by US consumer confidence and the PCE deflator (the Fed’s favorite inflation measure) on Friday.
What to Watch Today…
- No major economic events are scheduled for today
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EUR
The beleaguered Euro fell against the U.S. dollar as global equities turned red and European gas prices jumped. The Euro had staged a modest rebound during the second half of July and early August. However, those gains are now just a memory.
The Euro has fallen over three percent from its summer high on August 11th and is now only half a percent from its year-to-date low. Other than a large psychological level for EUR/USD on the horizon, there is not much in the way of economic reasoning to defend the Euro from further weakness.
AUD
The Australian dollar has bounced off a month low versus the U.S. dollar overnight. Chinese banks cut their loan prime rates to support growth. As Australia’s largest trading partner, any stimulus measures for the world’s second-largest economy is a boon for the Aussie economy as well.
