The U.S. Dollar is trading in mostly familiar ranges ahead of tomorrow’s much-awaited Fed meeting and presser at 2 PM.
Overview
Markets are still digesting the JP Morgan Chase takeover of First Republic Bank, which seemed like a move toward appeasing fears of a deeper banking crisis. The concern now is about the long-term health of the financial system after regulatory authorities admitted fault in failing to act before things got to a critical point for other units like Signature Bank and Silicon Valley Bank. Regulators seem to be unable to, well, regulate. Furthermore, Euro-zone banks slowed down their lending activity as caution has taken over the sector. Tomorrow and Thursday, heads of the most influential central banks in the U.S. and the other side of the pond will address their take on banking instability. In terms of data, we will get March Factory Orders as well as Durable Goods Orders at 10 AM.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
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AUD ⇑
The “Aussie” Dollar is climbing following the decision by the Reserve Bank of Australia to hike interest rates further. The 25-basis-points move brings their benchmark rate to 3.85%. As explained in previous meetings, the RBA is committed to combatting inflation, which has started to finally slow down in pace after March numbers came in lower than expected, bringing the yearly average down to 5.0% after it had been above 6.0% for Q1.
The tightening is not done and this could translate into a more hawkish week for regions outside the U.S. experiencing more painful inflationary pressures.
MXN ⇑
While Mexican Peso is starting off slowly today, it is important to remember that the currency is trending around levels last seen in the summer of 2016. Stronger Gross Domestic Product than most other countries with international importance and healthier expectations for interest rates and stability are all boding well for MXN. Expect major moves tomorrow as it tends to affect flows rapidly as Fed’s Chairman Jerome Powell speaks to the press.
