The U.S. Dollar stayed put overnight as trading sessions returned in most of Asia and European continent.
A little bit of self-correction seemed to poise currencies like the Euro and Pound to make a comeback, but that push towards recovery against the greenback proved to be temporary. Underwhelming Gross Domestic Product in the Eurozone and Manufacturing Purchasing Managers Index data in Britain sank the shared major currencies.
We might see very tight markets ahead of the Fed’s announcement later today at 2PM, which will not feature a press conference, but analysts will immediately turn the focus on what will be on the committee’s assessment of inflation. If satisfied, chances of future hikes soon will increase and perhaps push the dollar beyond this year’s best levels. ADP Employment solidified the image of a strong American economy with 204K payrolls added over an estimated 198K for April.
The shared currency is down to its weakest prices since January 5th, just at the cusp of being below its worst level of 2018. GDP figures for Q1 revealed a 0.4% expansion, meeting the low expectations that economist foresaw. Frankly, the environment is healthy, but the growth pace is low and could become worrisome if it does not pick up in Q2.
The European Central Bank has based its potential tightening stance on the consistency of widespread recovery, but Italy is dragging and the bigger economies are only expanding at measly levels. Hiking interest rates for 2019 may still be delayed further. Producer Prices are scheduled for tomorrow, which will help gauge if there is enough inflationary growth in business activity.
The Pound fell by over 1.0% yesterday as indicators kept shedding away at the idea the U.K. economy remains strong during Brexit talks. The May 10th meeting for the Bank of England is looking to be a gloomy one as PMI figures in the U.K. marked a 17-month low for April.
In addition to low GDP, manufacturers are struggling to achieve much in terms of new expenses, investment, or hiring. Sterling remains near its lowest point of 2018 and was falling at the time of writing.