The U.S. Dollar is taking a dive currently as markets digest data and markets eagerly wait for clarity on trade talks between the U.S. and China.
Overview
Indeed, various narratives emanating from the White House about when something fruitful could be presented are keeping markets focused on any official word. Markets want to know if a new tariff schedule will come out for China in the next few weeks or if this is the start of long-term back-and-forth that will require certain tariffs to be eliminated gradually for negotiations to progress. Without anything certain, markets may curb their enthusiasm, but for now the friendlier tone has played a role in the recovery of equity exchanges.
Data this morning revealed a shocking jump for Durable Goods Orders in March with a reading of 9.2% when just 2.0% was estimated. Meanwhile, the latest reading of Initial Jobless Claims showed that there was a slight uptick in comparison to the prior week’s figures with 222K looking for benefits this time instead of 215K. We will gauge optimism amongst consumers via the University of Michigan Consumer Sentiment survey out tomorrow. In the meantime, all eyes and ears will be on trade and headlines will direct the roller-coaster. As a reminder, the U.S. Dollar had just started to overcome losses and getting away from the weakest overall level since July 2023. We are now making our way there with this negative trend.
What to Watch This Week…
- University of Michigan Consumer Sentiment 10AM Friday
- Monex USA Online is always open
The complete Economic Calendar can be found here.
MXN ⇑
The Mexican Peso continues to strengthen over the Buck and is trading at a fresh new best not seen since start of October last year. Inflation data earlier came out higher than expected, which is being taken as a healthy sign for the financial environment. Banxico, the central bank, has been cutting interest rates and has plenty of room to keep doing so with a benchmark interest rate of 9.0%. Prices rising a bit and economic growth remaining are evidence that loose monetary policy has not been disturbing and that policymakers have been right to exercise their measures. Trade talk will also keep volatility high and perhaps these levels could change rapidly.
EUR ⇑
The Euro is staying afloat and holding on to gains from the European session as optimism seems to be picking up some steam. German IFO surveys gauging confidence in Business Climate, the current state, and future expectations all registered better readings than expected. Lately, the need for European countries to envision a future of more security and energy independence has produced new budgets from member nations, with higher concentration into military spending commitments and upgrades to infrastructure. Since the Ancient Continent is willing to get away from an era of austerity, investors are eagerly moving towards Euro-denominated assets.
