The U.S. Dollar is trading in tight ranges to start a data-heavy week as markets prepare for big earnings reports and tariff talk continues to hit the newswire
Overview
In general, the has not been a ton of change from where FX flows were last week as markets remain on edge about the potential for trade deals or much higher costs if nothing is achieved. U.S. Treasury Secretary Scott Bessent says there are seventeen countries working on bilateral trade deals, excluding China.
Meanwhile, four out of the “Magnificent Seven” will be gauging their value, which is expected to show an increase of 15.0% in profits. Although we have plenty of data points this week, nothing is out today, and analysts are warning that plenty of the statistics and breakdown behind figures scheduled will only be covering a time prior to “Liberation Day” and the anxiety behind increasing the challenges to free trade. Volatility will remain high and keep us guessing, but things are relatively quiet for now. The Buck is 1.0% away from its lowest point since December 2023, which was hit last week.
What to Watch This Week…
- JOLTS March on Tuesday 10AM
- Conf. Board Consumer Confidence Tuesday 10AM
- GDP Q1 on Wednesday 8:30AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
MXN ⇑
The Mexican Peso reached its strongest value against the dollar since the start of October of last year. Banxico, the central bank, will not be meeting until May 15th but traders are wondering if officials will see the need to take a break from slashing interest rates as inflationary pressures have returned to affect the financial environment. Since policymakers are not looking to escalate price growth, they may hold back on their loose path and maybe announce cuts of only 25 basis points going forward. With relations with the U.S. carefully managed, Mexico is avoiding the worst of trade anxiety while holding up the USMCA as best it can with the challenges to status quo. MXN could have room to gain if indeed officials start to preamble a pause to cuts.
EUR ⇓
The Euro has been sliding after it climbed to its highest point since November 2021 seven days ago. Indeed, the shared currency fell by 1.8% during that period as talks about de-escalating the tension all-around on trade has revived the outlook for 2025. With April almost coming to a close, the focus will be on how poor was Q1 while speculation begins on whether central banks are willing to slash rates in order to withstand possible contractions and recessionary pressures. The European Central Bank will not meet until June 5th so there will be plenty of data for officials to digest. Thus far this month, the shared currency has climbed by 4.8%.
