Daily Market Update

Dollar Falls to One-Week Low

July 03, 2018

Currency markets were quiet overnight with the greenback trading modestly lower against the majority of its counterparts. The Mexican peso gained over a percent against the U.S. dollar, erasing its steep losses from Monday.

Overview

The Swedish krona surged after Riksbank committed to a plan to raise rates “towards the end of the year.” Overall, the Bloomberg Dollar Index fell to a one-week low.

Factory orders and durable goods orders will be released later this morning and represent the only scheduled risk event on today’s schedule. However, we will continue to monitor headlines surrounding global trade tensions and pending tariffs.

U.S. stock markets close at 1p.m. and bond markets close at 2p.m. so expect quiet ranges during the second half of the day before the Independence Day holiday tomorrow. All U.S. markets will be closed tomorrow.

 

EUR

The Euro edged higher late yesterday on the news that Germany’s coalition government found a compromise on the migration crisis and dodged a further political crisis. The news eases worries that there will be new elections in Germany.

Economic data also allowed the Euro to hold its gains. Eurozone PMI firmed 0.8% month over month for a 3.0% gain on the year. This represents the highest level since May 2017.

 

GBP

The British pound enjoyed a rare spurt of strength overnight following slightly dovish comments from the central bank. Bank of England member Michael Sanders, who has voted for a hike at the last three meetings, said that the central bank might need to raise rates faster than the market expects.

 

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