After falling for the last week, the greenback found some support yesterday after St. Louis Fed President James Bullard somewhat walked back his previous ultra-dovish position that the economy warranted a 50 basis point rate cut at the July meeting.
Overview
Bullard did reiterate that he favors a 25 basis point cut next month. The greenback largely held on to its gains in overnight trading.
For his part, the President continued to rail against the Federal Reserve in an interview with Fox Business. Trump says that the central bank’s policy is “insane” and said that the Fed is taking money out while the European Central Bank is pouring money in. Trump also touched upon the dollar by stating that other countries have devalued their currency and the U.S. cannot because of Federal Reserve policy.
Recent economic data certainly merits at least a rate cut conversation and this morning’s docket was no exception. The Durable Goods order report released this morning was mixed at best. Total goods ordered fell 1.3% in May and the month’s prior reading was downwardly revised. However, orders for non-military goods excluding aircraft rebounded 0.4% after falling in the month prior.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
NZD
The New Zealand dollar continues its march higher against the U.S. dollar. Indeed, the antipodean currency has gained for an eight consecutive day marking its best run in a year and a half. The Reserve Bank of New Zealand held its current monetary policy in place at the conclusion of their meeting today. Some market participants had bet that the RBNZ would surprise markets with a rate cut today. The central bank did maintain that further rate cuts may be needed “over time.”
GBP
GBP/USD saw some volatility overnight and the sterling opened weaker this morning. A report showed that a retails sales survey dropped to its lowest reading since 2009. Political uncertainty will also keep the sterling from rallying much. The two front runners to replace Theresa May will face off tonight in a question and answer session. Johnson continues to be the odds-on favorite and his position on a possible hard Brexit is worrisome for sterling bulls.
