The Dollar is on the retreat this morning, a stark contrast from the dollar’s rally yesterday.
The safe-haven greenback found widespread support during yesterday’s session following a report that President Biden is looking to make good on his promise to raise taxes on the wealthy. The proposal would raise the capital gains tax for people making over $1 million a year to 39.6%. Immediately, stocks took a hit which benefited the U.S. dollar. However, it appears that markets are shaking off the headline today on the realization that the proposal faces a big political hurdle in Congress and potentially months of negotiations.
U.S. equity futures are back in the positive today, likely as a result of positive economic data across the globe. After strong PMI data released in the EU, the U.K., and Japan, the U.S. will take its turn when data is released at 9:45 a.m. today. U.S. New Home Sales will hit the tape at 10 a.m.
ECB President Christine Lagarde and Treasury Secretary Janet Yellen will speak at a Bloomberg event on climate change at 10:30 a.m.
What to Watch Today…
- PMI data at 9:45 a.m.
The Euro has jumped nearly half a percent against the U.S. dollar today. Despite the impressive move, the common currency is just recouping its losses from yesterday’s session. EUR/USD is essentially unchanged from Wednesday afternoon. The boost for the Euro comes on more evidence the economic recovery is underway in the bloc.
The EU’s manufacturing purchasing managers index rose to a record high in April. Euro-area services grew in April for the first time in eight months. In short, service, manufacturing, and composite PMI all showed strong growth from a month ago and blew away economists’ expectations.
Much like the Euro, the British pound was able to regain ground on the U.S. dollar following strong PMI data. U.K. economic activity accelerated at the fastest pace in seven years this month. IHS Market’s flash Composite PMI climbed to 60 in April, the best since 2013. Service sector PMI rose to the highest level since 2014.
A separate report showed that U.K. retail sales grew 5.4% in March, double the gains of February.
GBP/USD rose only 0.2%, however.
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