The U.S. dollar found some strengthen early in the evening but reversed those gains following breaking news abroad. U.S. Treasury Secretary Steven Mnuchin said that the greenback’s strength was a “good thing” in the longer term, walking back some of President Trump’s verbal intervention from last week. Nevertheless, the greenback is weaker against the majority of its rivals, except a few commodity-based currencies.
The dollar has extended its losses in early trading after data showed some speed bumps for the housing market. Housing starts fell 6.8% on a month of month basis in March, failing to meet dismal expectations of a 3.0% decline. Building permits did surprise to the upside, but not enough to stop the dollar’s decline.
Later this morning, industrial production is expected to expand 0.5% in March, up from a flat reading in February.
The Australian dollar and other commodity-backed currencies are lower this morning as the price of iron ore collapses. Iron Ore, a major export of Australia, is down 7.0% over the last two days, despite strong growth data released in China.
The Aussie is also under pressure after the Reserve Bank of Australia’s minutes showed policy makers believe underemployment “remained high.” The minutes also showed concern for the country’s housing market.
The British pound experienced wild fluctuations last night and is now currently nearly 1.0% stronger against the U.S. dollar than last night’s close. In a surprise announcement, British Prime Minster Theresa May called for an early general election for June 8th. May is seeking to consolidate power in Parliament in an attempt to strengthen her hand for Brexit negotiations. An opinion poll released yesterday shows her Conservative party with a 21 point lead over Labour, meaning she is likely to add to her parliamentary majority. As a result, the sterling has benefited and reached its strongest level since February.