Daily Market Update

Dollar Drops v. Euro; MXN Falls on Trump Threats

August 23, 2017

Predictably, the U.S. dollar gave up yesterday’s gains against many of its counterparts and fell modestly overnight. The greenback has followed the trend of short bursts of loses or gains, only to reverse them during the next session.

USD

Predictably, the U.S. dollar gave up yesterday’s gains against many of its counterparts and fell modestly overnight.  The greenback has followed the trend of short bursts of loses or gains, only to reverse them during the next session.  Overall, the greenback has been mostly range bound over the past few weeks.  The Bloomberg Dollar Index is slightly higher overnight mostly on gains versus the New Zealand Dollar and the Mexican peso. Predictably, the U.S. dollar gave up yesterday’s gains against many of its counterparts and fell modestly overnight.  The greenback has followed the trend of short bursts of loses or gains, only to reverse them during the next session.  Overall, the greenback has been mostly range bound over the past few weeks.  The Bloomberg Dollar Index is slightly higher overnight mostly on gains versus the New Zealand Dollar and the Mexican peso.

The Mexican peso dropped nearly a percent against the dollar after President Trump made fresh threats on the border wall and NAFTA at a raucous campaign-style event in Arizona last night. Trump seemed to threaten a government shutdown saying “If we have to close down our government, we’re building that wall.”   

Later this morning, Markit will produce its service and manufacturing PMIs at 9:45 a.m.  New Home sales will cross the wire at 10 a.m. Dallas Fed President Robert Kaplan will speak to Oil Group in Texas at 1p.m.

 

EUR

The Euro rebounded from yesterday’s losses following the release of strong economic data and a rather bland speech from European Central Bank President Mario Draghi.   German PMI impressed and pointed to the economy growing over two percent for the first time in 5 years.  The overall Purchasing Managers’ Index for manufacturing in the Euro zone rose to 57.4, slightly beating expectations.The Euro rebounded from yesterday’s losses following the release of strong economic data and a rather bland speech from European Central Bank President Mario Draghi.   German PMI impressed and pointed to the economy growing over two percent for the first time in 5 years.  The overall Purchasing Managers’ Index for manufacturing in the Euro zone rose to 57.4, slightly beating expectations.

Early this morning, Mario Draghi spoke in Germany in which he failed to address any policy change.  He did not reference the common currency in his remarks.  Draghi will speak at the Jackson Hole symposium on Friday.

 

GBP

The British pound slumped further, touching a two month low against the U.S. dollar and extending multi-year lows versus the Euro.  The fresh sell-off came on the back of news that the British government seems to be softening its stance on parts of the Brexit negotiation.  Prime Minster Theresa May is expected to concede that EU law will influence the U.K. long after Brexit.  Today’s news may end up being a non-event but it’s another example of how Brexit uncertainty is putting downward pressure on the sterling.

 

Let’s Talk
Ready to save money, save time, and reduce risk?

It’s quick and easy to get started. Fill out the form below and a Tempus market expert will connect with you shortly. Our team will work closely with you to develop a personalized strategy for your global payment & currency needs.

Talk to an Expert