The U.S. Dollar is down all across the board as the build-up in tension between China and the U.S. is perceived as a negative for the American economy going forward.
The typical trend of investors moving to the buck as safe-haven is being challenged with other majors rising in the face of an economic re-opening that is going well after months of inactivity. President Donald Trump is expected to make an announcement on policy with China at some point later today. Equity markets hit the brakes as we also watch for the situation in Hong Kong and how that may affect trade down the line.
Personal Income and Spending revealed a really bad picture for April as people could not leave their homes or faced new financial challenges. Income fell (-10.5%) when almost half of that was expected and spending declined by (-13.6%) despite a rise in online purchases. We need to assess the situation once we get through todays explanation of policy changes in regard to China. Other regions are focused on their own economic recovery and are seeing their currencies benefit meanwhile. It is the weakest value for the buck overall since March 13th per the Bloomberg Dollar Spot Index.
What to Watch Today…
- No major events scheduled for today
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The shared currency is up to its strongest level since March 26th as data for the bloc only show signs of upward movement and expansion after a week of cooperation in order to pass a rescue package to uplift the continent. Inflationary growth in the form of Consumer Price Index for the Euro-zone rose on average for the year as it stands now at 0.9% despite the obvious deflationary month-to-month pressures experienced through quarantine. As we gauge the magnitude of the funds implemented and look for other headlines, we feel confident that the appreciation we foresaw for Euro will continue to materialize especially as long as there are many negative items affecting the U.S.
The Pound is trying to take advantage of a weak dollar and is rising a bit because of positive news about a return to normalcy. It was announced that Monday will see the return of gatherings of multiple people and schools will resume. Meanwhile, the U.K. is also going to try flexing some diplomatic muscle by offering up to 300K Hong Kong passport holders a path to British citizenship. The city-state was once a colony of the British Empire and ceased to be in July of 1997.