Daily Market Update

Dollar Slightly Lower; Yen Up as Stocks Fall

June 25, 2018

The U.S. dollar is lower against most of its rivals overnight, continuing the trend from Friday’s session.


The Bloomberg Dollar Index touched an 11-month high on Thursday but found significant resistance. Trade tensions are dominating headlines again this morning after the Treasury Department said it will increase scrutiny of Chinese investments into certain U.S. industries. Stocks abroad and U.S. futures are awash in red. The Japanese yen was the biggest beneficiary, climbing to a two week high against the U.S. dollar.

The Turkish Lira saw massive see-saw trading overnight after Recep Tayyip Erdogan won a mandate to govern. The controversial leader will now become the longest-tenured ruler of the modern era.

Today’s economic docket is light but things pick up throughout the week. At 10 a.m. New Home Sales will cross the wire, followed by Dallas Fed. Durable Goods order will highlight Wednesday, followed by Gross Domestic Product on Thursday. Personal income and spending will close out the week on Friday.



The Euro continued to recover from a multi-month low touched last week overnight despite more disappointing data and rising bond yields. Germany’s IFO business outlook slumped lower in June, but met expectations. Trade concerns continue to weigh on business outlooks around the globe. Auto makers were the biggest losers last week following more tariff threats.

Political realities will likely keep the Euro’s bounce in check as it has all year. German Chancellor Merkel is holding private talks with members of her coalition on refugee policies and euro-area reforms tomorrow. And Italian bond yields jumped as the anti-migrant party gained support in a second round of municipal voting, according to Bloomberg.



The Sterling showed signs of life against the greenback during the second half of last week and the trend continued this morning. On Thursday, the Bank of England kept rates on hold, as expected. However, the voting showed a growing divide among policy makers with a hawkish slant. BoE Chief Economist Haldane voted for the first time to raise rates. He will be speaking on Thursday and is likely to explain his vote. Probability of an interest rate hike in the U.K. has risen significantly since the vote on Thursday so Haldane’s address will be watched closely.


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