Buck mostly quiet, Sterling falters
The U.S. Dollar remained in mostly similar ranges, only seeing movement against it when it comes to the Oceanic currencies and Mexican Peso.
Indeed, the weekend saw a bit of a climb for petrocurrencies with oil trying its best to forget about the negative prices of the futures crash weeks ago. WTI Crude is now around $31.00 per barrel, signifying that production cuts have made a difference. Additionally, the buck may circulate a whole lot more with Fed Chairman defending the Feds new expanded role in providing aid to the economy. Powell again echoes the sentiments of many when he said recovery will be slow especially without the necessary measures taken on the fiscal side.
There will most certainly be a need for the government to step up all efforts. On Friday, Job Openings and Labor Turnover Survey (JOLTS) revealed that there were 11.0MM layoffs in March, capturing the true magnitude of this crisis. Re-opening is going on in stages and more restricted in certain parts of the country. This week we shall also keep an eye for headlines that touch base on the attempts to subside the tensions between the U.S. and China. Officials from the worlds second largest economy want legally more freedom for their tech giants Huawei and Qualcomm when dealing with the west.
What to Watch Today…
- No major events scheduled for today
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The Euro is being held back from gains as the bloc of EUR-nations opens up the economy differently. While in Italy they are loosening shelter-in-place and opening gyms on May 25th, Spain will extend its state of emergency for another month. China is also working diligently in Europe, providing equipment and assistance to make up for a loss in image as the globe questions China’s willingness to be open when communicating the scale of any problem. Meanwhile, French President Emmanuel Macron is set to do a video conference with German Chancellor Angela Merkel where some initiatives and pact between the two nations will be discussed.
The Pound may be headed toward some losses as developments over the weekend point at a possible troublesome combination for the economy for the rest of the year. Once again, Brexit anxiety is showing up after Prime Minister Boris Johnson said that he would be willing to walk away without a trade deal if his proposals and renegotiation do not satisfy.
At the same time, the Bank of England is toying with the idea of exploring negative interest rates. Overall, the U.K. may face big problems if it does not resolve a clean transition with the EU and gives no yield to holders of British bonds.