The U.S. Dollar continues to be under pressure and the Bloomberg Spot Dollar Index is set for its third day of declines.
Overview
Global equities are rallying for their fourth straight day which could represent the biggest rally since November of 2020. Many companies have reported better earnings than expected, despite rising prices and supply chain issues. Renewed risk appetite is coming at the expense of the greenback.The dollar has maintained its lows after an APD report showed private payrolls fell by 301K, drastically failing to meet expectations of a 180K increase. Non-Farm payrolls are due out on Friday and represent the largest risk event on this week’s calendar. Perhaps today’s number is a blip but if Friday’s print is also disappointing, it could cause the Fed to become more cautious in the pace of their interest rate hikes. That would likely cause further dollar selling and allow stocks to continue their rebound from January’s lows.
What to Watch Today…
- No major economic events are scheduled for today
TOP SPOT AGAIN! | #1 G10 Forecaster for 6th Time
Bloomberg ranks Monex USA (formerly Tempus) for top G10 Forecaster, NZD, CHF, AUD, MXN, and GBP! Learn More
EUR
The Euro is in rally mode and is set for its fourth daily gain against the U.S. dollar. The Euro shot higher following an inflation print that showed consumer prices rose to a record. Euro-area energy prices rose a shocking 28.6% from a year earlier. The increased inflation will put pressure on the European Central Bank to raise rates later this year.
Money markets have moved up bets and are pricing in a modest hike in July, up from September. While the U.S. Fed is very likely to outpace the ECB in interest rate hikes, the potential differential closed a touch this morning and has allowed the Euro to gain.
CAD
The Canadian dollar also took advantage of a weakening greenback. The loonie only gained 0.2% overnight but is on track for its third consecutive weekly drop against the U.S. dollar. Oil prices are up this morning, giving the loonie some relief. OPEC+ agreed to make another modest output increase next month. The small supply increase was not enough to knock the price of oil off its recent highs.
Ready to spin the currency market moves in your favor?
DISCOVER HOW WE CAN HELP YOU SEND or RECEIVE PAYMENTS
