The U.S. dollar see-sawed yesterday, finishing the day up against most of its counterparts.
The dollar slipped in early trading as consumer prices failed to meet expectations. However, the greenback rallied a bit in the afternoon following the release of the Federal Reserve meeting minutes from March. Policymakers held a slightly more hawkish tone towards inflation but warned that a trade war would have a negative effect on the economy. As a result, odds for a June rate hike ticked higher and benefited the U.S. dollar.
The U.S. dollar is continuing its advance this morning following warnings from the European Central Bank and soft economic data abroad. After tumbling yesterday, U.S. stock futures are higher this morning as the U.S. has not yet acted to punish Syria for a chemical attack last week.
Weekly jobless claims came in line with expectations and did not stop the dollar’s momentum. Consumer sentiment will round out the week’s economic data on Friday.
The Euro traded another leg lower overnight, following a modest sell-off yesterday afternoon. This morning, the European Central Bank released their minutes from their last meeting. In what is being considered a more bearish sentiment, the ECB sees risks to the world’s economy as “tilted to the downside” in part due to the possibility that higher tariffs will hurt trade. The ECB also mentioned the Euro’s recent strength as a possible hindrance to the Eurozone economy. The strong currency could hurt exports as consumers will look elsewhere for cheaper goods. This was apparent in data released earlier this week that showed a decrease in German exports.
Eurozone industrial production dipped in February, adding to the Euro’s overnight woes.
The Canadian dollar continues to hold near its best rate in six weeks against the U.S. dollar on higher oil prices and a better outlook for NAFTA negotiations. WTI spiked to its highest level in three years yesterday on increased tensions in the Middle East. President Trump has warned of an attack on Syria in response to a chemical attack and the U.K. looks to join the U.S. In addition, Saudi Arabia intercepted a ballistic missile and shot down two drones launched by Iranian-backed Yemeni rebels. WTI has retreated modestly this morning but the Canadian dollar remains strong.