As the governing members of the Federal Reserve enter their traditional media blackout period before the central bank’s meeting next week, the United States Dollar is struggling to find direction this morning.
Overview
Concerns over a potential recession inside the US combined with a mixed bag of minor data last week did little to aid the Buck. Ultimately USD could not hold onto the gains posted through the front end of the week and returned to neutral territory by Friday’s close.
With little on the docket for major data releases out of the US this week, price action will likely be driven by sentiment and geopolitics. Rising tensions with China could prove to be a factor once again, weighing on global risk sentiment. Otherwise, markets are currently anticipating a 25 basis point hike from the Fed on May 3rd. This is unlikely to change substantially over the course of the week, but surprises in data points or speeches from other central banks around the world could provide the Buck with some momentum in either direction. For now, it looks like the Dollar will stay within its current holding pattern.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
Monex USA introduces OPTIONS
With currency exchange rates in a constant state of flux, companies transacting cross-border face the risk of losing substantial sums of money if they fail to hedge their exposure to these shifts. Monex USA now offers a wide range of FX options that could help your business better manage risk. Learn More
EUR ⇑
The single currency posted gains against the Buck through the weekend that, while small percentage-wise, pushed prices to very nearly their strongest against USD this calendar year. The European Central Bank is meeting next week as well, currently expected to hike the region’s key rates by 25 basis points. Inflation in the Eurozone, however, seems to be stickier than inside the US, and the ECB’s current targets reflect that their hiking cycle will likely continue longer than that of the Fed.
JPY ⇓
Japanese Yen starts the week lagging against G10 peers on the heels of new Bank of Japan Governor Kazuo Ueda’s comments over the weekend. Ueda stressed that the central bank is not at the stage yet to talk about normalizing yield curve control. This “stick to the status quo” approach is likely to keep JPY prices depressed over the short term until if and when the BoJ decides to change its course.
