The U.S. Dollar is starting off the week trading within tight ranges following a bit of a tumble throughout last Friday.
Overview
March seems to be starting of with a bit of relief for the Buck’s peers after weeks of almost muted flows that led to February’s less-than-one-percent uptick in value. There has been such a focus on Tech earnings and their effects on equity markets that FX volatility has dropped to its lowest in four years. The S&P 500 Index climbed 16 out of the last 18 weeks, making it the best run of that type since 1971.
The Buck’s restrengthening thus far into the year is due to consistency in economic growth unlike other regions, a confident monetary policy approach with interest rates not denting demand, as well as rallying stocks. We have a week packed with important risk events for the world’s second largest economy as China conducts its 14th National People’s Congress where a vision for the country will be outlined while addressing challenges. Additionally, a slew of data will be released while highlighted by testimony from Fed’s Chair Jerome Powell Wednesday as well as the European Central Bank’s decision announcement on Thursday. U.S. Non-Farm Payrolls will be out on Friday.
What to Watch Today…
- ECB Meeting on Thursday
- Fed Powell’s Testimony on Wednesday
- US Nonfarm Payrolls, Friday 8:30 AM
- Monex USA Online is always open.
EUR ⇑
The Euro is up for now as traders await statements from the ECB on Thursday while reviewing some key indicators for the Euro-zone as they are released. S&P Global Services Purchasing Managers Index as well as Producer Price Index for the area will be out tomorrow before Retail Sales are out on Wednesday. We get reaction to the ECB meeting Thursday and the final revision to Q4 Gross Domestic Product to close out on Friday. Chances for a rate cut stand at 71.0% by the June 6th meeting so we will monitor if that changes at all post-ECB.
GBP ⇑
Sterling is up today, managing to stay afloat in recent days even after Bank of England’s Governor Andrew Bailey sounded open to interest rate cuts happening before reaching the inflation target. The goals may be changing for BOE officials who see price growth as stubborn while also coping with global items affecting that disinflationary pace. Since economic outlooks point at difficulty ahead, the central bank might have to consider stimulus. On Wednesday, Chancellor of the Exchequer Jeremy Hunt will present the annual budget, which is expected to show a surplus. If so, expect comments from policymakers making a case that more aid to the economy should come from fiscal spending to spark growth.
