Currency markets were muted overnight with the greenback down slightly from last night’s close.
Overview
However, you would be forgiven for not noticing as the dollar is holding tight ranges against most of its major counterparts.
There is a slew of data due out this morning that could stir up volatility. The U.S. retail sales, producer price inflation for May, and Empire State manufacturing for June are out at 8:30 a.m. EST. Industrial and manufacturing productions will follow at 9:15 a.m. We will also be watching headlines from the EU-US summit in Brussels today before President Biden meets with Russian President Vladimir Putin tomorrow in Geneva.
The Federal Reserve also begins its two-day meeting today. The rate decision, economic forecasts, and the so-called “dot plot” will be released at 2 p.m. tomorrow afternoon. Fed Chairman Jerome Powell will hold a press conference shortly after.
What to Watch Today…
- Retail Sales at 8:30 a.m
AUD ⇓
In a quiet overnight session, a 0.3% dip for the Australian dollar seems noteworthy. The Reserve Bank of Australia released the minutes from their latest policy decision. While the RBA did not change policy at that meeting, they did lay out several scenarios for its QE program which is due to be decided at next month’s meeting. Indeed, the central bank is due to decide on July 6th if they are going to undertake a third round of bond-buying when the current tranche ends. The options sketched out by the RBA in the minutes have a dovish slant, causing the Aussie to slip.
GBP ⇓
The British pound slipped further and is now down 0.7% against the U.S. dollar this week. Yesterday afternoon, the British Prime Minister made official what had been speculated for weeks: the lifting of all Covid restrictions was pushed back from June 21 until the end of July. The economic setback has taken some of the shine off the high-flying currency. Despite the sterling’s recent stumble, the pound is up over 4% year-to-date against the greenback.
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