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The DXY peaked at 90.92 on N.Y. on Monday, with broad dollar strength seen on the eback of higher Treasury yields, decent incoming U.S. data, and the easing of trade and geopolitical tensions. The dollar index advanced to its best level since March 2. Read more
OVERVIEW FX market this week awaits the much anticipated Q1 GDP data from both the US and the UK. GBP remains under pressure but with weakness in the currency, this has made the interest rate decision for the BoE even harder. USD is enjoying a bounce helped by the rise of the 10-year yield. HIGHLIGHT The yield from the 10-year Treasury bond is notching at the psychological 3% mark. US DOLLAR The US Dollar continues to rise, and the highlight of this week will be on the Q1 GDP data. BRITISH POUND The Pound continues to trade under pressure as GBP/USD drops below the psychological 1.40 level, and with the outlook for an interest rate hike at 50/50, this volatility is set to continue. EURO The Euro composite PMI held steady in April at the 14-month low seen in March at 55.2, which was marginally better than expectations. CANADIAN DOLLAR The Canadian Dollar remains on the back foot helped by comments by the Bank of Canada chief that he was comfortable with inflation remaining above 2% throughout 2018. AUSTRALIAN DOLLAR The Australian Dollar dropped 1.3% last week, its biggest weekly fall since mid-March as the market awaits the Australian CPI. FEATURED CURRENCY The Japanese Yen weakened to its lowest level in two months against the US Dollar as Bank of Japan's Governor Kuroda confirmed that Japan is going to stick with their very accommodative policy. Read more
The dollar rallied during the London morning session, was showing a 0.4% gain on the euro, a 0.3% advance versus the yen and Swiss franc, and 0.4% gains versus both the Australian and New Zealand dollars, as of the late AM. The greenback has firmed versus the sterling and Canadian dollar, albeit by a relatively more modest extents. Read more
The dollar has maintained a steady-to-firmer bias in early-week trading, making fresh highs versus the yen, although holding below respective Friday highs against the euro and other currencies. EUR-USD drifted moderately lower from Friday's closing levels, making a 1.2265 low before steadying, leaving Friday's 17-day low at 1.2229 unchallenged. Read more
Due to high inflationary pressures, currency traders had assumed that the Bank of England would be raising rates this year. BOE governor Carney threw cold water on that assumption during an interview with the BBC: Read more
This week, we had the standard economic “on one hand, on the other hand” situation. The IMF released their latest World Economic Outlook which contained bullish data. However, we’re seeing some weakness in the OECDs leading numbers along with the Nowcasts released by the Financial Times. First, let’s look at the positive numbers from the IMF: Let’s begin with the lower left-hand corner, which shows the rise in various PMIs over the last few years. Read more
The Canadian economy was hit by the oil price declile in 2014 and experienced a mild recession. But over the last two years, it was bounced back. Now the Bank of Canada is faced with the possibility of higher growth and the accompanying inflation. Read more
March data was all positive, including the Index of Leading Indicators, buoyed particularly by the interest rate spread and ISM new orders, and also included building permits and starts, retail sales, industrial production and capacity utilization. My usual note: I look at the high frequency weekly indicators because while they can be very noisy, they provide a good Now-cast of the economy, and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. Read more
The DXY posted two-week highs in N.Y. on Friday, taking its cue from firmer Treasury yields. EUR-USD fell to 1.2250 lows, down more than 100 points from overnight highs. USD-JPY topped at 107.86, a two-month top. USD-CAD printed two-week highs of 1.2749 following cooler Canada CPI and retail sales. Read more
