Daily Market Update

Euro and Pound Concede Further Ground to the Buck

May 17, 2018

The U.S. Dollar is trading in familiar strong ranges across the board as trouble hits other economies.


In Europe, the momentum the economy once carried has slowed down and now progress is under threat from political friction in Italy and other smaller nations. The coalition coming up in Italy may represent brutal change as the change of the guard would like to transform the country’s norms. Additionally, the geopolitical issues brewing in the Middle East affect the ancient continent more directly with immigration and business flow incurring higher costs.

Domestically, the American economy remains on the upside with yet another figure, the Philadelphia Fed Business Outlook, registering a much higher reading than expected at 34.4 over 21.0, indicating that decision makers are convinced the economy will indeed expand in their region. The greenback continues to benefit from solid regional data.

NAFTA deadline for presenting a deal to congress will have to be extended because it is today and House Speaker Paul Ryan has been told it will certainly not be met. CAD and MXN remain under pressure as uncertainty mounts.



The Euro sits at low levels without much in terms of redemption. Italian politics continue to be the shared currency’s reason for downfall, but also issues with dealing with international problems. The EU has close ties to Israel, where plenty of violence is taking place, while also holding major interests with keeping together a deal for Iran so that the energy industry continues without the interference of sanctions. Debt in Italy, debt in Greece, a slower economy, and diplomatic concerns are overwhelming the Euro, which will likely stay swinging in these ranges until end of Q2.



The Pound had gone up overnight, but returned to weakness after the U.K. government had to announce that a report floating out there was erroneously stating that the British were willing to stay in the EU customs union beyond 2021. The falsehoods, the deceit are only another blow to Prime Minister Theresa May. It is obvious she is dealing with a split cabinet and even communication on what the plan would be is unclear. Brexit paper with supposedly her approval will be published soon.


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