U.S. Dollar Falling after central bank meetings

The U.S. Dollar is trading in weaker ranges across the board based on positivity from meetings for the European and British central banks.

Overview

Bank of England Governor Mark Carney and his officials surprisingly upgraded the economic outlook for the U.K. regardless of the Brexit uncertainty they have previously addressed.

At the time of writing, European Central Bank President Mario Draghi is speaking at his press conference and improving the Euro prospects based on his determination to stay course on cutting intervention. The losses thus far are of about half a percent against all of the greenback’s counterparts with the Japanese Yen the only exception.

Inflation is also slowing down a bit per Consumer Price Index figures this morning that registered at a 0.2% pace falling below the estimated 0.3% for August. That figure may only just help solidify that the buck is going to close the week heading downward. This correction in U.S. Dollar value makes sense per our narrative as we foresee some appreciation ahead for other majors as the year ends.

EUR

The Euro is rising as ECB President Mario Draghi set a hawkish tone during the committee’s announcement and follow-up media session. While Draghi pointed at concerns over the current state of world affairs and trade tensions, he said he saw the economic outlook staying on course and that the discrepancy in growth between EU member nations was now the lowest since the 1990s.

Furthermore, he showed confidence in remaining unfazed by protectionism and crises such as the Turkish chaos this summer. We think this may be a turning point for the shared currency and perhaps a rise in value is inevitable with economic momentum building on the continent’s side.

GBP

The Pound climbed by over half a percent based on the BOE meeting resulting in a positive picture for the U.K.’s future. Officials stated that they expected Q3 to show Gross domestic product growth of 0.5% instead of 0.4% as previously forecast. They mainly noted spending among consumers as the better-than-expected factor to justify adjustments.

After increasing interest rates last month and following up with such optimism, Sterling may see gains that bring it back near its levels of Q1 2018. It is a year of swings, not steadiness.