The U.S. Dollar is holding on to its half percent gain thus far in May following a holiday weekend in the U.S. and Canada.
Markets remain on edge regarding trade as traders digested the news of Prime Minister Theresa May leaving her U.K. post and further acknowledgement from U.S. officials and the President that there is nothing set for fixing the tariff-war with China. It is hard to tell when the buck will cease to benefit from being a safe-haven as last week revealed there are some dents to the economy.
The end of this week will help clarify just how concerning this may be. Gross Domestic Product on Thursday and Personal Income Friday should move the needle one way or the other. We do need to prepare for the lulls of summer as we start running out of major events to look for once EU parliamentary elections are done and the G-20 Summit that is scheduled to be held in Osaka, Japan end of June.
What to Watch Today…
- No major events scheduled for today.
The Euro is not rising; in fact, it has fallen by over one percent in the last six weeks. Hope for the shared currency’s appreciation remains though, especially after seeing a return to in both Consumer and Services Confidence. This week will be a quiet one in terms of data, thus we will be monitoring election results in order to gauge the political direction the assembled body will be moving towards. Experts are certainly eager to see how British seats are filled since the party currently in power was neither expecting nor preparing to run new as well as interested candidates.
The Pound fell some more to start this week on news that the U.K. will have plenty of seats in the EU Parliament filled by the Brexit Party, a political movement under pro-Leave icon Nigel Farage. Now that both main British parties are on the ropes, Labour Party leader Jeremy Corbyn said he would support a second referendum, but traders took Farage’s triumph as evidence that a “no-deal scenario” is very much still at play.
Conservative Tories got only 9.0% of the vote; Labour took 14.0% and the Brexit Party 32.0% of the assigned seats. All this indicates that indeed Britain is very divided and disappointed with current leadership overall. Sterling prospects look dire in the near-term, but any surprise could spark renewed strengthening for Pound.