The U.S. Dollar is trading in mixed ranges with recovery for some of the commodity-based currencies while majors such as the Euro remained muted or turned downward.
Overview
Data in the form of May Retail Sales released this morning surprised with contractions instead of expanding as expected. April’s original reading of 0.2% advancement was cut to (-0.1%), thus suggesting there is a loss in consumption.
A survey of Business Activity in New York also turned sour. In general, there seems to be a belief that economic indicators in the U.S. will show enough softening that the Federal Reserve will make a rate cut in September. There are plenty of headlines making a big deal of how crucial it is for the Fed to act prior to elections. In a commentary by Fed officials, the messaging remains one of being cautious and waiting for indicators to tell the story before jumping into slashing borrowing costs.
Tomorrow, MonexUSA offices will be closed for the Juneteenth Day holiday. We will have a Bank of England decision to cope with Thursday when we return as well as U.S. Jobless Claims and Housing Starts.
What to Watch Today…
- JUNETEENTH DAY – Wednesday – Monex USA Closed
- Bank of England Thursday
- Monex USA Online is always open.
CHF ⇑
The Swiss Franc has improved by over half a percent ahead of the Swiss National Bank meeting on Thursday. Much of the gains are due to the CHF playing a safe-haven role in the midst of turbulent times for both France and Germany. As the bond markets go wild, the Alps seem like a safe place to place funds. We shall see if the SNB feels the need to foster easing as in the past they have stated interest in making their market and currency more accessible.
MXN ⇑
The single currency, after taking heavy losses against USD to open this year, is attempting to claw back some ground this morning and has gained just shy of a quarter of a percent against USD. The EUR/USD pair is now sitting much closer to prices last seen just before both the Fed and ECB meetings last month, more in line with the macroeconomic data out of the region. French CPI this morning showed inflation increased 4.1% annually, with Germany’s year-over-year inflation slightly lower at 3.8%.
