The U.S. Dollar is trading in very favorable ranges on a day without any economic data and ahead of Jerome Powell’s testimony to Congress tomorrow.
Overview
Indeed, the head of the Federal Reserve will face questions about his economic outlook and the Fed’s path following a week in which the U.S. economy showed signs of strength with relatively impressive labor numbers. This helped keep an ongoing surge for the buck, which rose by over 1.0% since the start of the month per the U.S. Dollar Index (DXY).
We also will look ahead to the FOMC Minutes Wednesday and inflation in the form of Consumer Price Index on Thursday. These along with Powell’s statements shall paint a clear tone for the economic mood of the country that could translate into an established strengthening for the greenback or a swing the other way in case concern overshadows excitement.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
EUR
The Euro is crashing and is now sitting 1.3% weaker against the dollar after climbing as much throughout June. Data starting to hint at stagnation or worse plus the nomination of Christine Lagarde as next head of the European Central Bank have been pushing the shared currency downward. We shall get more details on her views and plans as the week progresses, but she is perceived as a dovish monetary policy advocate.
Germany showed a little bit of life with some positivity in Industrial Production, an uptick of 0.3%, but still under what was expected considering major contractions previously. It is hard to see a comeback for the Euro-bloc and its tender, but it has been seen before. Nevertheless, the Euro is going to be riding tough waves the next few weeks.
GBP
Sterling is down by over 1.5% since the end of June, falling victim to the lack of hope for a trade deal under Tory leadership as they start to vote on a Prime Minister today. Boris Johnson, who clarified that he is committed to seeing Brexit through even if no deal is agreed upon, is favored to be elected at 74.0% according to a YouGov survey of members. We see this week as the potential one for the start of a new British administration and the start of major volatility for an already under-pressure Pound.
