The U.S. dollar continued its momentum from Friday’s trading early Monday, gaining against the Euro and Japanese yen. Despite a dismal Non-farm payrolls number, the greenback found support as the unemployment rate fell to 4.5%. The dollar was able to extend most of those gains as Fed Vice Chair William Dudley said that the Fed would continue to normalize rates at the same time as they work to minimize their balance sheet.
There is no major economic data slated for release today so expect the dollar to take its cues from abroad. However, Fed Chair Janet Yellen will speak at the University of Michigan at 4p.m. this afternoon. Yellen will take part in a Q&A following her remarks which could spark modest volatility.
According to Bloomberg, the week’s Easter holidays have already begin to weigh on volumes and liquidity. Much of Europe and South America will be closed for Good Friday and Easter Monday. U.S. equity markets will be closed Friday, but currency markets will remain open.
The Euro dipped lower against the U.S. dollar as French election worries have hit the headlines once again. Far-left candidate Jean-Luc Melenchon has surged in the polls, making the election a four-way horse race. The rise of the left, may take votes away from the mainstream-pro Euro candidate Emmanuel Macron. Macron has been widely expected to beat far-right candidate Marine Le Pen in the second round of French voting, the rise of candidates to his left have led some to question his viability. As a result, the spread between French and German debt widened to the highest since February. The first round of elections will be held on April 23rd, with the two top vote getters matching up again on May 7th.
The British pound popped slightly higher overnight ahead of a week jammed with important data. Consumer prices, jobs and house price data will all cross the wires this week. Bank of England Governor Mark Carney will also speak on Wednesday morning. If Tuesday’s inflation data fails to reach the consensus 2.3% y/y, the sterling will likely weaken going into the Easter Weekend.