The U.S. Dollar is trading in mostly familiar ranges following the weekend with some trade headlines being digested at the moment.
President Donald Trump is meeting with Russian leader Vladimir Putin today in Helsinki, Finland, which may produce some more headlines to start the week. In regards to trade developments, Trump referred to the European Union a “foe,” further fueling trade worries that could keep equity and commodity markets guessing just like last week.
For now, the greenback is trading at its best overall levels since October as measured against its 10 major counterparts per the Bloomberg Dollar Spot Index. Retail Sales are once more providing evidence of a growing economy with June figures meeting expectations of half percent advancement. Additionally, May numbers also were revised upward from 0.8% to 1.3%. We shall see if the July dynamics of good data and concerns over trade continues to maintain the currency swinging while mostly staying afloat.
The Euro has collapsed by 5.7% since mid-April and is struggling to find signs of appreciation ahead of a week with plenty of Industrial production and inflationary indicators scheduled for release this week. The NATO Summit did leave leaders a bit surprised, but now more cooperation between members is expected as even EU officials on the Brexit negotiation want to help Theresa May get support behind her dealings.
A cohesive European Union needs to be ready to confront political anger against its centralized institutions and find ways to maintain its economy sustainable while facing challenges to its trade pacts. This week shall define if economic momentum can boost the shared currency’s value or if the divergence with American progress is no match.
The Pound remains in sensitive territory as it finds direction while political turmoil dominates Britain’s news. The visit by Donald Trump adds pressure to May’s cabinet about what relations may look like with the rest of the world once a Brexit deal is reached. In addition, May made a statement over the weekend about the need to come together or perhaps a deal could not be achieved.
The fact that she brought up “no deal” as a possibility further worried those in her Conservative party who think May’s plans are deviating from the independence that Brexit seekers want from the EU. Retail Sales, Production prices, and Retail Sales will all be out this week. It is likely that the Bank of England will hike rates on August 2nd to fight high inflationary growth so this week may be of further help to tightening prospects as well as currency gains if forecasts are met.