Daily Market Update

U.S. Dollar Closes Weaker After Weeks of Gains

September 18, 2020

The U.S. is down this morning and is about to close the week roughly 1.0% weaker than where it started. It would represent the first losing week for the greenback in three weeks.

Overview

Markets were quiet overnight and stayed mostly unaffected by the Bank of Japan’s meeting or any statements from central bank officials. The Fed was said to be considering extending constraints on bank dividends.

All eyes at the moment seem to be on trade relations around the world and especially between the U.S. and China as a major takeover of social-media phenomenon Tik-Tok. U.S. Commerce Secretary Wilbur Ross said if no deal is achieved, Tik-Tok will suffer a shutdown November 12thOn the fiscal side of news, we still will not have a stimulus/rescue spending package as most Congress members left home for the weekend.

Only piece of meaningful data we will see today is the University of Michigan’s Consumer Sentiment Survey which will be released at 10AM. Other than that, there will be Fed officials speaking throughout the day who will be asked about the Fed’s regimen moving forward. We will see if anything exciting comes off this pre-Fall Friday.

 

What to Watch Today…

  • No major events scheduled for today

Complete Economic Calendar can be found here.

Read highlights from yesterday’s Currency event…

Currency Recap Image

EUR

The Euro steadied this week and managed to return to the ranges of two-year best levels beat in August. After a week in which it was established that inflationary growth is returning with upticks to the Consumer Pride Indices across the Euro-bloc, the shared currency seems worthy of holing onto. Only thing to watch at the moment and how it may develop in the next week is a significant rise in infections across the continent that could stall the progress being made in a recovery fueled by a robust spending package and return to mobile activity for its population. Any setbacks or restrictions will be monitored, and we hope the flare-ups can be controlled, cause no further damage.

 

GBP

Pound Sterling has appreciated 1.4% in the last week, boosted by dollar weakening and growth in the Retail Sales sector. The data for August was indeed better than expected coming in at 0.6% over 0.4%. One major part of the Bank of England meeting and talks about tools to use to help the economy, is that the Pound came back after a deep decline because negative interest rates came into the conversation. Officials clarified that the central bank is not planning on implementation, but rather do its job as a financial authority commission and fully investigate what the concept could mean if utilized. Additionally, European leaders such as EU President Ursula Von Der Leyen are still hopeful on a trade deal with the U.K.

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