The U.S. Dollar is gaining ground after great performance across economic indicators.
Gross Domestic Product for Q4 of 2017 revealed a 2.9% pace of growth above its expected 2.7% final estimate, while Personal Consumption increased by 4.0% over 3.8%, and the Core Personal Consumption Expenditures pace remained at 1.9% as forecast. The greenback is strengthening, as of the time of writing, but rallies have a history of fading quickly this year and times rapidly change in these markets.
These are some of the wildest times we have seen in the past decade and we have to humbly succumb to the swings. Yesterday the dollar looked almost 1.0% better than its counterparts after news of tariff-minimizing talks between China and the U.S. going relatively well to avoid a “trade war,” but suddenly no progress had been made and markets tumbled. The buck was half a percent weaker by the end of our trading session and equities had an even more tumultuous day. It almost seems as if we are watching the rhythm of cryptocurrencies being copied by global activity.
The Euro fell as a result of the pendulum-like nature of FX flows as good economic data in the U.S. re-established that the American economy is also healthy. Recent European data has failed to impress, yet the shared currency has not been punished too much for it. With important statistics going the way of the U.S., we may see Euro taking a breather and perhaps fall to its lowest levels of the month right before the end.
The Pound is down for right now as there are confusing headlines over progress on Brexit. For one, it is a negative item for Sterling that the Prime Minister Theresa May said that negotiations will need to take longer as many issues are yet to be resolved prior to establishing new commercial ties.
Additionally, there were some reports that the Northern Irish border question would be addressed as officials from the Northern Irish Party seemed ready to iron out the concerns and come with solutions, but the BBC has denied such a headline to be true. Thus, this negates the Pound a reason to increase in value and add further uncertainty over Brexit. The Pound is just very resilient because it should be worse off by now.