The U.S. dollar held narrow ranges overnight on a lack of risk events and low volume trading and we expect a quiet day. The only data released this morning is second-tier weekly jobless claims. The print was right in line with expectations and continuing claims is still near a 40-year best. As usual, the data has not had a meaningful effect on the greenback.
This week’s Fed fun will continue later today. Federal Reserve Governor Jerome Powell will be speaking before the Senate Banking Committee. He not expected to focus on monetary policy; rather he will focus on the possibility of easing banking regulations. Powell is seen as a less influential policy maker than some of the speakers earlier this week.
The Fed will release the results of its annual stress tests. All 34 of the nation’s largest banks are expected to pass for the first time since the examination was introduced.
The Euro is slightly lower this morning but is largely range-bound. French business confidence rose to its highest level in six years but the data was unable to lift the single currency. However, the print does indicate that businesses are endorsing the proposed policy direction of newly-elected President Emanuel Macron.
There is no major data left for the rest of the week so the EUR/USD pair may stall out at the current, familiar range.
The British pound has held on to yesterday’s rally overnight. The sterling bounced of a two-month low yesterday following a hawkish speech by Bank of England’s Chief Economist Andy Haldane. Policy makers seem to be inching towards normalizing policy, which would be a sterling-positive event under normal circumstances. However, the growing uncertainty around Brexit and Prime Minister Theresa May’s ability negotiate terms with the rest of Europe has held the sterling back. May is in Brussels today for the first time since her massively disappointing election results earlier this month.