Daily Market Update

GDP fails to move U.S. Dollar higher. Quiet ranges

July 30, 2018

The U.S. Dollar remained mostly unmoved over the weekend as markets await the busy week of central bank activity.

Overview

The Bank of Japan on Tuesday and the Fed Wednesday will be the main risk events to watch out for before we get the Employment Situation on Friday.

On trade news, Chinese officials have indicated willingness to negotiate with the U.S., but are asking for a less aggressive approach from the administration. An economy that can grow above 4.0% quarterly and the benefits from less trade conflicts are definitely positive factors for the greenback, which are holding it steady. July will likely close with the buck slightly weaker than where it started as the Bloomberg Dollar Spot Index indicates already a 1.2% drop for the month.

 

EUR

The Euro could not find room for growth or deep losses as last week the mix of underwhelming data and hopes for trade resolution kept the shared currency mostly intact. Over the weekend, Five Star Movement founder and comedian Beppe Grillo commented on his wish for a referendum in Italy that would decide on EU membership. Surprisingly, this has been mostly brushed off but is indicative of further political instability ahead. All the up and down swings these past 30 days kept Euro from mostly unchanged this month.

 

GBP

With Parliament out for five weeks, expect little in terms of news out of the U.K. in August. Prime Minister Theresa May will try to consolidate her cabinet’s full support moving forward, but opposition in Parliament will not be able to gear up until September. That end to Q3 is crucial as there is an October 18 deadline for a separation agreement between both parties that can help move trade deal negotiations forward. Sterling lost a little more than half a percent of its value in July.

 

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