The U.S. Dollar is down slightly across the board as markets try to remain steady despite pessimism growing about what we can expect for the remainder of the year.
Overview
The Organization of Economic Cooperation and Development (OECD) explained in their global assessment of the current world’s economic state that things are likely going to slow down, potentially into 2024, as a weak recovery has materialized in light of stubborn inflation as well as contractionary monetary policies. This comes along with data from China revealing the weakest export figures in three months.
However gloomy things may seem, as we now cope with the challenges in June from an underwhelming first half of the year thus far, investors are hoping there is a chance for stimulus, particularly from China, to alleviate fears around markets. Expect doubts to be countered with optimism based on faith that a revival is still due for the global economy, especially if a pause in central bank tightening inspires more risk appetite.
Now that inflation has been credited to other factors the central banks cannot control, they want to pause and exercise a wait-and-see approach. Nothing is consistent nor guaranteed, but it explains some of the dollar-weakening at the moment and possibly to extend.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
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EUR ⇑
The Euro stopped some of the bleedings that has brought it down to its weakest point since March. As pointed out yesterday, traders and investors are looking forward to the final Q1 reading for the Eurozone, which stands at 0.0%. After the OECD report, it looks like there are plenty of obstacles to still climb for the EU as it copes with the results of an undesirable war that has affected energy and foodstuffs supplies. The Ukrainian dam that took a hit from the Russian assault is said to be causing tremendous environmental damage in the south of the country, only exacerbating friction in crops.
CAD ⇑
Movement for the “Loonie” seems suspended ahead of the Bank of Canada’s policy decision announcement at 10 AM. Current chances of a hike stand at 35.0% for today while at 70.0% for the July 12th meeting. The BOC has refused to hike ever since bringing up its benchmark interest rate to 4.50% back in January. We can see CAD losing some ground if the take today is a dovish one without a hike, while it could still turn out to be a positive development if, in a hawkish tone, they promise to come back to hiking in July. After all, inflation has not gone away.
