The U.S. Dollar is trading in mostly familiar ranges as markets look for positivity in the midst of an escalated conflict in the Middle East.
Overview
Iranian drone missile attacks took place over the weekend, targeting Israeli territory testing to maximum capacity the “Iron Dome.” The U.S. and other countries are doing what they can to lower already heightened tensions as markets react. Last week was already one filled with bad news for risk-taking as the S&P 500 Index suffered its biggest weekly drop for the year thus far.
Inflationary and labor data has presented evidence of an expanding U.S. economy that is likely to prevent the materialization of three 25-basis-points interest-rate hikes in 2024. Earlier this morning, the release of March Retail Sales showed yet more gains in consumption, adding to an upward revision from the month prior. It is hard to foresee a “Dovish” Fed, but some members will speak throughout the week, sharing thoughts, particularly on Thursday. We have Housing numbers as well as Industrial Production on Tuesday and the Fed’s Beige Book on Wednesday. The week’s risks will likely be dictated by geopolitical talk. The chances of a Fed cut by June are now less than 20.0%.
What to Watch Today…
- Housing Starts, Tuesday 8:30 AM
- Industrial Production Tuesday 9:15 AM
- Monex USA Online is always open.
EUR ⇑
The Euro remains down, trending around its weakest level since November following last week’s established divergence in central bank policy needs. While the Euro-zone needs stimulus, the U.S. keeps running away from modest expectations. We will get a glance at confidence from ZEW Survey Expectations out of Germany tomorrow and more inflation data on Wednesday. Tomorrow, the Euro could be influenced by the International Monetary Fund’s revision of the economic outlook.
GBP ⇑
Sterling is now the best-performing currency amongst the G-10, as it is the one to have lost the least value thus far in 2024. Overall, the Pound has only lost 0.5%. The Bank of England is likely going to need to be cutting interest rates, but data lately has surprised over gloomy forecasts. Governor Andrew Bailey will be speaking on Tuesday and Wednesday.
