The dollar is under widespread, although only moderate, pressure this morning on what looks to be a classic “risk-on” trading day.
Overview
U.S. futures are in the green and European and most Asian equities rose overnight, sapping demand for traditional safe-havens. The market also shrugged off worries that the Johnson & Johnson vaccine could delay the impressive progress seen on the inoculation front.
Earnings season continues today including results from some of the world’s largest banks. Goldman Sachs reported impressive results before the bell this morning, adding to the positive risk sentiment. The economic docket is light today with only the Fed’s Beige Book due out this afternoon. Fed Chairman Jerome Powell will speak at the Economic Club in Washington later today.
Bitcoin rose to a fresh all-time high as Coinbase is set to go public via a direct listing.
What to Watch Today…
- Federal Reserve Beige Book
EUR ⇑
The Euro continued its recent climb higher against the U.S. dollar. The pair touched its strongest level in nearly a month overnight before giving back some of those gains. Some analysts have pointed out to the dollar’s inability to rally after higher-than-expected consumer inflation data yesterday may allow the common currency to regain its footing. We agree that as long as the global recovery remains on track, the Euro should find modest support.
Adding to a brightening outlook for the EU, Pfizer announced this morning it plans on boosting its second-quarter vaccine deliveries to the EU by 50 million doses
NZD ⇑
The New Zealand dollar was the biggest mover overnight, gaining over a percent against the greenback. The Reserve Bank of New Zealand announced they would maintain its current policy and keep its key interest rate at 0.25%. Some had bet that the RBNZ would surprise markets and cut rates further, causing those traders to quickly stop out their Kiwi shorts and buy NZD, boosting the price.
Despite this morning’s jump, NZD/USD remains within 1% of Monex’s quarterly forecast.
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