The U.S. dollar has stopped the bleeding, at least for now, after falling for five consecutive days.
Overview
The Dollar Index remains at a 14-week low and slipped further against the New Zealand dollar and the Japanese yen.
There is a slew of second-tier data this morning including new home sales and the Conference Board’s consumer sentiment. But the biggest event on today’s docket is a speech by Fed Chairman Jerome Powell at 1 p.m. Eastern. President Trump has continued his assault on the institution by calling the central bank a “stubborn child” for not cutting rates. The speech by Trump’s appointee this afternoon will shed more light on whether the Fed will indeed cut rates at their next meeting. In addition to Powell, there are also four other Fed speakers scheduled to speak today so the dollar will susceptible to headline risk.
What to Watch Today…
- Powell speaks at 1 p.m.
Complete Economic Calendar can be found here.
NZD
The greenback did continue to fall against the New Zealand dollar that has now risen for seven consecutive days. Exports from the island nation combined to a record last month. The Kiwi strength may be short-lived if the Reserve Bank of Australia shocks investors with a rate cut at their meeting tomorrow. Market participants are pricing in a 20% chance of a rate cut tomorrow, with a higher likelihood at their August meeting.
JPY
The safe-haven Japanese yen continues to gain as global economic worries and increased trade and geopolitical tensions rise. The yen rose to a six-month high against the greenback overnight before ceding some of its gains. The U.S. announced sanctions against Iran in response to the shooting down of an unmanned drone last week. In response, Iran’s President called the White House “mentally retarded.” Any possibility of a diplomatic remedy seems gone. In addition and with unfortunate timing, a report surfaced President Trump has kicked around the idea of withdrawing from a longstanding defense treaty with Japan, adding to investor’s risk-off position.
