The U.S. Dollar fell against the Euro but maintained mostly quiet ranges overnight against counterparts across the board.
Overview
As of now, solid economic data out of the Euro-bloc revived that region’s currency to its strongest level since mid-April. The buck’s momentum recently has truly diminished, primarily as a result of increased chances that the Federal Reserve will loosen monetary policy this year and cut rates. Ultimately, this week could end up being one of the worst performances of the year as much of the doubts and focus are now on the health of the U.S. economy.
Tomorrow, we will get the Employment Situation and if it happens to show further negative signs, we would not be surprised if the greenback has more room for further losses. It is worth noting that trade issues have not gone away and they may still play a role in lifting the buck as a safe-haven.
Wednesday talks with between Mexico and U.S. officials over tariff discord did not end in finding an agreement to prevent potentially 5.0% being added on incoming Mexican imported goods planned for next week. Peso is naturally trading around its weakest levels since the end of 2018.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
EUR
The Euro jumped to its highest point in seven weeks following the release of Gross Domestic Product numbers that met expectation in their final Q1 revision as well as positive reaction to the European Central Bank’s meeting and press conference. As always, Draghi mentioned he will do everything to combat troubles ahead.
At the time of writing, ECB President Mario Draghi mentioned the possibility of cutting rates at some point down the line being brought up by members of the monetary committee. We shall see if somehow Draghi manages to slow down the Euro, which did dip as those comments were being reported and reacted to. For now, Euro is up.
GBP
The Pound was trying to recover some ground but continues to be in downturn mode as candidates to replace Theresa May as Prime Minister look clueless in how to manage a Brexit deal themselves. Plenty of names have been discussed in addition to the main, and most expected to succeed, Boris Johnson, but they all seem to have in common the belief that a no-deal scenario cannot be ruled out, or perhaps entirely preventable.
The options at hand do not seem to give much in terms of the math necessary to have Parliament pass the current deal or even a re-negotiated one. Tory leadership itself is deeply divided on how to approach the next few months prior to the October 31st deadline. The Labour Party is not fully behind the idea of a second referendum yet there are some “Remain” Tories who would welcome the idea. Gridlock is the norm and confusion is only dragging Pound down further.
