The U.S. dollar shrugged off a major scandal at the Federal Reserve yesterday and remained in a tight range against most of its counterparts. Richmond Federal Reserve President Jeffery Lacker resigned effective immediately after admitting to leaking confidential information in 2012. Lacker was not a voting member this year but was considered an influential member of the monetary policy setting team. Nevertheless, the greenback was mostly unfazed.
The quiet ranges have persisted in early trading, even after the release of strong jobs data. ADP reported that private companies added 263K jobs in March, crushing estimates of a 185K gain. However, February’s print was downwardly revised by 50K jobs. The dollar was able to establish small gains against the Japanese yen following the release, but the Dollar Index overall has been unchanged.
Two different service indexes will be released at 10 a.m., but attention has already shifted to the release of the minutes of the last Fed meeting at 2 p.m. There is little expectation the Fed will raise rates at its next meeting in May so investors are likely to concentrate on discussions of plans to unwind the Fed’s nearly 4.5 trillion dollar balance sheet.
The Euro was mostly unchanged overnight, despite waning political risks in the Eurozone. Last night, far-right candidate Marine Le Pen lost her composure during a debate after being criticized for being too soft on the Euro from another far-right candidate. In two snap polls following the debate, Le Pen came in fourth.
The British pound jumped across the board this morning as U.K. services grew faster than expected in March. IHS Markit’s Purchasing Managers Index for services rose to 55 from 53.5 in February, beating expectations of 53.4.
The pound has had a mostly sterling beginning of the year, registering its first quarterly gain versus the greenback since mid-2015 on the back of resilient economic data. However, the currency’s gains should be limited by the uncertainty over the two year negotiating process for “Brexit.”