The U.S. dollar opened this morning mostly where it left off yesterday. A slight improvement in risk appetite was unable to dent the greenback as a slew of poor data abroad helped King Dollar.
Overview
The House of Representatives overwhelming passed the fourth major round of coronavirus support. The bill totals 484 billion dollars worth of stimulus which is aimed at small businesses. President Trump is expected to sign the bill in short order.
Durable Goods orders for March fell 14.4%, worse than the expected fall of 12.0%. A breakdown of the number shows some bright spots. But the data has quickly been dismissed by analysts, including this one, because we only started to see the slowdown at the end of March. Next month’s number will be a better indicator. Later, the University of Michigan sentiment for April is expected to show further weakness.
What to Watch Today…
- University of Michigan consumer sentiment
Complete Economic Calendar can be found here.
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EUR
The Euro fell to fresh lows against the U.S. dollar overnight before recovering some of those losses. Nevertheless, EUR/USD remains near its monthly low. European leaders did come to an agreement on a 580-billion-dollar relief package that was aimed at immediate relief. But leaders failed to come to terms on a much larger two-trillion-dollar package to deal with the longer aftermath of Covid-19.
The fundamental data remained bleak as well. German business confidence dropped to a record low, according to the Ifo Institute. The reading of 73.3 registered far below the median estimate of economists. The reading comes a day after PMIs showed record low activity in the private sector.
GBP
The British pound held familiar, weak ranges versus the U.S. dollar. The U.K. was not immune to the deluge of poor economic data released today. U.K. retail sales fell to record lows. Sales including fuel dropped 5.1% in March, the lowest reading since records began in 1996. Once fuel was excluded from the number, sales were down 3.7%.
A further breakdown of the number shows that clothing stores saw the biggest tumble, 35%. Alcohol store sales soared by 31.4%, which is the largest increase on record. It is also worth noting that this figure excludes supermarket sales, which account for most alcohol sales. Cheers!
