Daily Market Update

Dollar Flat; Busy Week Ahead

August 21, 2017

The U.S. traded in a quiet range overnight. The greenback experienced some volatility last week, but it was mostly short-term. Indeed, the Bloomberg Spot Dollar Index closed the week only 0.3% stronger than the week prior.

USD

The U.S. traded in a quiet range overnight.  The greenback experienced some volatility last week, but it was mostly short-term.  Indeed, the Bloomberg Spot Dollar Index closed the week only 0.3% stronger than the week prior.  Strong U.S. retail sales were balanced out by geopolitical risks in the States and abroad.  The beginning half of the week might bring much of the same.

There is no first tier economic data slated for release today and only the Richmond Fed manufacturing index on tomorrow’s docket.   New home sales will cross the wire on Thursday, followed by existing home sales on Thursday.  The biggest piece of data is Durable goods orders on Friday morning.  The Jackson Hole symposium of central bankers begins Thursday.  U.S. Fed President Janet Yellen will speak at 10 a.m., followed by her European counterparts at 3 p.m.

President Trump will give a prime-time address on the U.S.’s Afghanistan strategy tonight.

The first coast-to-coast solar eclipse in 99 years will take place today.  While there are some obscure theories on how an eclipse can affect equity markets, it will decidedly not play into today’ currency market.  

 

EUR

The remained largely range bound against the U.S. dollar last week, ultimately falling 0.2%.  The European economic docket is light at the beginning of the week.  Attention will be squarely on this week’s Jackson Hole symposium of global central bankers.  European Central Bank President Mario Draghi will speak around 3 p.m. Eastern on Friday, five hours after Janet Yellen.  Inflation is likely to the main topic of discussion in Wyoming.  Inflation pressures in the U.S. and Europe have remained low even as the employment situation has tightened.  While the ECB has tried to tap down expectations of a new policy announcement, speculation will continue to swirl.  Draghi used the Jackson Hole summit three years ago to set the stage for its 2.3 trillion-euro bond-buying program.  

 

GBP

The British pound lost just over a percent against the U.S. dollar last week on the back of mixed data and Brexit uncertainty.  The sterling will continue to be under moderate pressure as Brexit negotiations will step up their pace.  The British government said over the weekend that it is turning up the pressure on the European Union.  The government will start releasing five position papers over the coming days, outlining where they stand. 

The next round of Brexit talks start August 29th.

 

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