The U.S. Dollar is trading in mostly familiar ranges while being pulled downward against Mexican Peso.
Overview
The Buck is slightly up for the week, according to the Bloomberg Dollar Spot Index, while seeing negativity per the MSCI Emerging Market Currency Index.
LATAM saw relief primarily led by MXN, which improved by 1.6% after impressive Retail Sales solidifying that fundamentals are still solid for our neighbor. Part of the reason for EM gains also has to do with Brazil’s and other central banks refusing to cut further into their interest rates, thus creating some monetary policy divergence with the Eurozone and Switzerland, which exercised loose measures.
Later at 9:45AM, we have domestic data in the form of S&P Purchasing Managers Index for June and Existing Home Sales at 10AM. Markets seem to be on risk-off mode and there may not be much left that could move the needle for the day. Any surprises in indicators might make an impact, but PMIs are expected to show continued expansion in America.
What to Watch Today…
- Monex USA Online is always open.
EUR ⇓
The Euro fell to its lowest level in a week following poor data from various PMIs in the Eurozone. Germany and France’s productivity have been held back, dragging the average for the zone to a very contractionary reading. Surveys show a lack of faith in Manufacturing expenditures while Services held and kept the Composite above 50.0, suggesting there are some doubts about buying into good times down the line. While the European Central Bank cut its benchmark rate, other regions refused and the shared currency has paid in loss of value. Things will be mostly dry in terms of indicators for the remainder of the month.
JPY ⇓
The Japanese Yen dropped overnight and completed a sixth straight session of losses, its worst streak since March. It is also nearing a fresh new 34-year low, which could trigger another FX intervention as it did back in April. U.S. authorities in the Treasury Department added Japan to their “monitoring list,” coming just short of designating the country a “manipulator.” China, Singapore, Vietnam, as well as Germany also happen to be on that list.
