Currency markets are off to a quiet start to the week after last week’s packed economic and central bank schedule.
On balance, the greenback was a winner last week after the Federal Reserve raised rates and increased their “dot plot” to show two more rate hikes this calendar year.
Markets in China and Hong Kong are closed for a public holiday, but trade tensions between the United States and China remain in the headlines. Global equities are lower this morning on the growing protectionist standoff. We are also keeping a close eye on this week’s OPEC meeting. Bloomberg News is reporting that there are talks to hike production but so far the price of oil has shown little reaction.
Today’s economic calendar is mostly empty but there a number of Fed speakers that could steer the greenback. At the time of writing, outgoing New York president William Dudley is speaking at a conference on bank reform. This afternoon Atlanta Fed President Bostic will speak on the economy in Georgia and incoming Fed President is slated for 4 p.m.
EUR/USD looks to be establishing a new, lower range after the Euro came under increased pressure last week. The Fed raised their rate outlook while the European Central Bank said rates will remain unchanged until at least next summer, highlighting the differential between the two.
The European Central Bank starts their annual forum today in Sintra, Portugal. ECB President Draghi will give remarks this afternoon and will give the headline speech early morning on Tuesday.
The British pound was unable to recover from last week’s decline and is currently at the weakest level in seven months against the U.S. dollar. On Thursday, the Bank of England will conclude their monetary policy meeting but no policy changes are expected. There is still a modest chance that the BoE will hike rates by the end of the year. BoE Governor Mark Carney will deliver his Mansion House speech on Thursday evening.