The U.S. Dollar remains in weaker ranges to start a new month and quarter that has waited no time to give us shocking breaking news.
Overview
As April gets going, OPEC+ nations decided to announce a sudden curtail in production over the weekend. Supplies are expected to be cut by 1.0MM barrels/day, which naturally advanced crude oil futures by 6.6%. The change of heart translates into a new reality for those who, on Friday, was hoping for the fight against inflation to end sooner rather than later.As Monday’s Asian and European sessions digested the news, currency moves were wild, but have started to come down some. Following a week in which central bankers promised not to manufacture a recession, they will need to weigh the impact that long-term oil price growth shall have on their policies. As Fed Chairman Jerome Powell said last week, officials cannot predict business decisions that increase prices even as they are facing record profits. Data-wise, we get S&P Manufacturing Purchasing Managers Index at 9:45 AM with some other gauges, primarily Construction Spending at 10 AM. Tomorrow we get a reading for Factory Orders and Durable Goods Orders for March.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
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EUR ⇑
The Euro is on the rise as risk-takers assess the situation going forward, with prices promising to climb along with oil. Regardless, the European Central Bank has sent signals of continuing their new tightening mandate and keeping away from promising any changes, much less cuts to interest rates down the line. Inflationary threats will only increase the odds of staying aggressive for longer, which bodes quite well for the shared currency after it managed to appreciate by 1.6% last month.
AUD ⇑
The Australian Dollar must be highlighted as the biggest mover this morning after going up by 1.1% despite expectations of a less hawkish central bank. The Reserve Bank of Australia will meet tomorrow and was highly expected to announce that it will pause interest rate hikes. Nevertheless, commodity prices rising is improving the perception of the “Aussie” buck as trade with China is only expected to increase while demand for oil will mean other raw materials will also advance. If price growth is a concern, central bankers may delay their pause to interest hiking. At the moment, risk-on mode has not been turned off and all is benefitting against the greenback.
