The U.S. dollar as a whole was mostly flat overnight but the Bloomberg Dollar Index is heading for its first weekly decline in four.
Overview
The majority of developments were abroad overnight but there are still a number of happenings in the U.S. today that could cause some volatility.
On the trade front, the U.S. is holding off on a decision about licenses for American firms to restart doing business with Huawei Technologies. China has said it would halt farm purchases from the U.S. threatening a Huawei deal.
The economic docket showed that producer prices fell in July which will likely solidify the case for more Fed easing. Excluding food and energy, PPI dropped 0.1% from the prior month. The annual increase of 2.1% is the lowest in two years.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
EUR
EUR/USD was mostly unchanged overnight despite more poor data out of the Eurozone. German exports had their largest annual decline in three years in June, adding to a recent slew of poor manufacturing data.
Political tensions in Italy are also prominent in the headlines this week. Italian bonds are tumbling as the chances of a snap election increase.
GBP
The British pound took a beating last night and fell to its lowest level versus the U.S. dollar since January 2017. The renewed sell-off was sparked by a report that showed the U.K. economy contracted for the first time in six years in the second quarter. Gross domestic product fell 0.2% in the second three months of the year, failing to meet expectations of a flat reading. If the U.K. fails to grow in the third quarter, the economy will enter a technical recession right at the new Brexit deadline. For this part, U.K. Chancellor of the Exchequer Sajid Javid shrugged off the idea that the economy might enter a recession but he did blame Brexit uncertainty for the downturn in the second quarter.
