The U.S. Dollar is trading in familiar ranges following an eventful week and commentary over the weekend that could put pressure on the trade front once again.
Overview
Trade aide to President Trump, Peter Navarro, said that he is ready to sign an executive order that will boost the use of domestic steel and iron included in government contracts. Data-wise we only saw the release of Empire State Manufacturing today, which surprised with double the expectation, indicating the New York region’s sector is optimistic and growing.
Tuesday will be a day packed with a slew of indicators from Retail Sales to Housing as well as Industrial Production, trying to push for consecutive months of expansion after contracting first half of the year. Fed chairman Jerome Powell is also scheduled to speak tomorrow at a Bretton Woods Dinner. The Bloomberg Dollar Spot Index is down over half a percent since the start of last week.
All these issues could come to foment the shedding of dollar positions globally and surely sink the buck across the board. For now, until a cut is made, the currency will maintain close to current ranges.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
EUR
The Euro is as steady as it has been in three weeks, gaining from lack of optimism in the global economy, particularly the admission by the Federal Reserve that things are slowing down and monetary intervention is needed. Additionally, upbeat results from Purchasing Managers Indices across the continent helped defy economic outlooks of dire times for the bloc.
With inflation in the form of Consumer Price Index out Tuesday as well as Gross Domestic Product, we shall get a clearer picture and see if Germany’s gloomy 2019 do not drag the rest of the area’s output. The largest economy in the continent has shown a lot weakening signs in the past two quarters.
GBP
The Pound is trading familiar ranges and looks to bounce back in Euro-like style if data points this week goes in its favor. Unlike its biggest trading partner, the U.K. saw terrible PMI figures that suggest business investment and general spending are being held back by Brexit uncertainties.
Tomorrow we get a picture of the labor situation to determine whether wages and hiring are improving or falling. As companies get away from infrastructure and long-term expenditures, we shall see if wages are still growing at a healthy enough pace.
