After starting out on the back foot to start the week, the Dollar is finding a bit of positive momentum in early trading.
Overview
The Bloomberg Spot Dollar Index is up 0.2% and is in the green against all its G10 counterparts except the British pound.
Some analysts point to quarter-end flows for the recent uptick in the dollar. The economic docket is light today so there is not much to change the direction of the greenback. Dallas Fed Manufacturing Activity for June is due at 10:30 a.m. Three regional Federal Reserve presidents will also speak today but this is not their first speaking engagement since the Fed’s meeting two weeks ago.
The largest risk event on this week’s agenda is Friday’s Non-Farm payroll print. Economists expect that the U.S. economy added 700K jobs in June after adding 559K in the month prior. The unemployment rate is expected to fall from 5.8% to 5.7% even as the Participation rate increases.
What to Watch Today…
- Dallas Fed Manufacturing at 10:30 a.m.
EUR ⇓
The Euro started the evening mostly unchanged against the U.S. dollar but took a quick 0.4% dip in a matter of minutes this morning following dovish European Central Bank commentary. The ECB’s Holzmann said that there is no room to raise rates given the weak inflation in the Eurozone. These dovish comments come as the Federal Reserve and its members have taken a hawkish shift in the face on higher-than-expected price pressures in the United States. If the outlook for policy continues to diverge, the Euro will come under renewed downward pressure.
GBP ⇑
The British pound has been able to hold off some early morning USD dollar strength and remains as the leading G10 currency to start the week. The pop higher is likely the result of a changing outlook for the British economy’s reopening. Over the weekend, it was announced that former Chancellor Sajid Javid would replace Matt Hancock as Health Secretary. Javid has said that he wants to see the country return to normal “as soon and as quickly as possible.” The change has caused some optimism that the country’s planned reopening will not get pushed back any further despite continued struggles with the so-called Delta variant of Covid-19.
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