The U.S dollar is slightly stronger this morning with notable improvements against its European counterparts on underwhelming data released abroad.
Overview
Later this morning, Markit’s service PMI and ISM non-manufacturing will cross the wire and will be compared to the disappointing PMI’s released in Europe and the U.K. Economists are expecting both gauges to hold mostly flat in January compared to December, but downside risks remain if the government shutdown proves to have caused a disruption.
President Trump will give his delayed State of the Union address tonight before Congress. The President is expected to address a wide range of topics but of course focus on immigration. Some analysts have warned that the dollar could come under pressure if the President “comes out swinging on trade.” Yesterday, the President and Fed Chairman Powell met for a rare dinner date yesterday that marked Powell’s one-year anniversary on the job. The President has repeatedly and unrelentingly criticized the Fed and their rate increase path.
What to Watch Today…
- State of the Union at 9 p.m.
The complete economic calendar can be found here.
EUR
The Euro sold-off yesterday and remains under pressure this morning. Euro-area PMI was revised slightly higher but came with a warning. IHS said their survey still signals “only weak growth in business activity.” In addition, Italian composite PMI missed estimates, highlighting the trouble in Europe’s third-largest economy.
GBP
The British pound dropped nearly half a percent against the U.S. dollar following poor economic data. Services PMI registered at 50.1, missing estimates and barely registering growth. A reading above 50 indicates an expansion. Analysts were quick to blame Brexit for the decline in growth.