What happened
- U.S. Dollar declined in value all across the board, 1.2% per Bloomberg Dollar Spot Index
- Signs of slow economic activity such as contraction in long-term spending hurt the buck
- Safe-haven currencies drifted apart as Swiss Franc climbed 1.6%, while Yen stayed quiet
- Heated campaign for a Tory U.K. Prime Minister kept Pound in check, “no-deal” scenario likely
- Benefits of recovery in economic indicators and a dovish Fed caused Euro to rise by 1.0%
- Per the MSCI Emerging Market Currency Index, the greenback sank in June by 2.0% following improved prospects of a solution to tariff wars
Tempus’ view
- July will be a month for U.S. Fed officials to build and discuss an argument for rate cuts
- U.S. Dollar troubles may not be over as Fed looks to cut and President Trump puts downward pressure in order to compete
- Euro could solidify its strengthening if first looks at Q2 data reveal a faster pace of growth
- Support in the U.K. for a “no-deal” Brexit could exacerbate Sterling losses further
- A deal between China and the U.S. is not imminent, but faltering numbers in both countries will force a faster resolve
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