The U.S. Dollar is trading in mostly familiar ranges as markets try to remain hopeful over the ceasefire and a return to the negotiations table to attempt ironing out a deal and improve relations.
Yesterday, U.S. President Donald Trump explained that the war is “very close to over,” indicating that all parties involved want to gather again by end of this week. While there is not a lot of clarity regarding the details, the positive tone pushed stock exchanges forward. This was also accompanied by news of new rounds of founding for artificial intelligence development as well as a revised upward outlook for ASML, the one company in the globe that makes the precise advanced machinery to manufacture cutting-edge microchips.
Nevertheless, a bit of cold water came from statements from U.S. Treasury Secretary Scott Bessent who stated in an interview that the administration is looking to return to using tariffs and is setting a goal that by July the duties schedule goes back to what it was prior to the Supreme Court decision to strike down the use of an emergency for imposing them. The official said different authorities and venues can make this happen. Without any major data points, we are at the mercy of breaking news, but for now FX moves are limited.
What to Watch This Week…
- Retail Sales, tomorrow 8:30AM
- Monex USA Online is always open
EUR ⇓
The Euro remains around its strongest level since February after a bit of seesawing with uncertainty over the diplomatic efforts to put and to armed conflict. It is a good development for the economic outlook of the Euro-zone that enthusiasm around risk markets has helped in easing anxiety as well as bringing oil prices below $100.00/barrel. Meanwhile, “hawkish” central bank policy seems to be supported by officials from the European Central Bank in their most recent comments, with ECB President Christine Lagarde seeming confident in a speech yesterday. Expect Euro to rise if any optimism rises from headlines about dialogue.
GBP ⇓
Sterling has basically recovered the losses experienced in March after the U.S. Dollar dominated from its military show of force and eventual “Petro-Dollar” run. As tensions ease, focus will be on confidence from Bank of England officials about the need to combat inflation. Some members may look to address the growing concerns over pain in the economy and how to look at being more stimulative. A lack of consensus on monetary measures globally is making for interesting times and will make for more volatile markets once war is not stealing the spotlight.
