Daily Market Update

U.S. Dollar Sustains Strength to Start New Week

May 07, 2018

The U.S. Dollar is settling in new territory, gained after a busy week in which most economic figures revealed a healthier economic state in the U.S. than in Europe.

USD

Additionally, optimism is high in regards to certain geopolitical developments such as talks with China over trade terms and peace in the Koreas have translated into advancement for the greenback.

At the moment, the dollar is near its best level overall for the year, according to the Bloomberg Dollar Spot Index. We feel that data figures have spoken and current multi-month best ranges are here to stay in the next few weeks as there will be few challenges that could tumble the buck’s momentum.

With oil prices rising to the best levels since November 2014, it is possible Canadian Dollar and Peso see a reprieve, but currently the uncertainty over NAFTA and elections in Mexico are preventing their appreciation in value.

 

EUR

The Euro has fallen 3.4% since the start of April as economic drag and uncertainty over the politics of Brexit and Italy weigh on the shared currency. Things may stay the way they are for Euro this week since here is no significant data that could undo last week’s damage. It is possible to see a Euro revival only if Euro-zone CPI surprises when it hits the wire Wednesday of next week.

 

GBP

The Pound has collapsed after declining by 5.7% since mid-April, seeing its value reduced to the near the worst of the year. Domestic political fighting is creating chaos for having a clear Brexit strategy as Prime Minister Theresa May’s Conservative party deals with a “civil war.” The conflict shows the imbalance of negotiations, with the EU having a cohesive plan of action while the U.K. crumbles in debate across all democratic institutions. We foresee issues and we shall watch for statements by Foreign Secretary Boris Johnson who shall visit President Donald trump this week in a an attempt to renew the Iran Nuclear Deal.

 

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