The U.S. dollar is mostly on the defensive, losing against most of its counterparts except the British pound to start the week.
Overview
Overall the dollar lost nearly a percent against its G10 rivals last week spurred by disappointing data. The Bloomberg Dollar Index is now at its weakest level since March 1.
There is not any major economic data set for release today so the greenback might stay under pressure as global equities tick higher and diminish demand for the safe-haven greenback. Durable goods and factory orders are on tomorrow’ docket. The Federal Reserve will have their interest rate decision Wednesday afternoon but are widely expected to keep current policy unchanged. Thursday sees the release of the Philadelphia Fed and weekly jobless claims. Markit’s manufacturing and service PMI will highlight Friday’s data.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
EUR
EUR/USD pushed to a two week high earlier today as global markets rose. There is not much in the way of economic data on either side of the pond, so the pair might find a relatively tight range today. EUR/USD traders will keep an eye on Brexit developments, a move towards progress on trade between China and the U.S. and the U.S. Federal Reserve meeting on Wednesday.
GBP
The British pound retreated overnight but still remains at an elevated level against the U.S. dollar. Indeed, the sterling gained over 2.0% against the greenback last week. However, the pair will be once again vulnerable to headline risk as Brexit, again, faces a pivotal week. Prime Minster Theresa May will continue to get votes for her plan that has already failed miserably, twice. Markets appear to be pricing in the likelihood that Article 50 will be delayed. The longer the delay, the more likely it becomes that an eventual Brexit will be watered down or a second referendum will be called. While unlikely, there are too many uncertainties to rule out a second referendum.
