Dollar Continues to Drop; Euro at a 3-Month High
JUNE 24, 2019
The U.S. dollar remains on the back foot after selling off during the second half of last week.
Overall, the Dollar Index is at its weakest level in 14 weeks and has fallen for five consecutive days.
The Federal Reserve indicated that rate cuts were coming in the near future last week, sparking the dollar sell-off. Traders are now looking ahead to a speech by Federal Reserve Chairman Powell for more indications on how dovish future policy may become.
This morning’s economic docket only saw the Chicago Fed met expectations so expect the greenback to continue to digest the dovish Fed and try to establish, newer, weaker ranges against much of its rivals.
What to Watch Today…
- Powell Speech Tomorrow
Complete Economic Calendar can be found here.
The Euro remained on the offensive to start the week, climbing to a three month high against its American rival. Much of the movement in EUR/USD can be attributed to dollar weakness, as the economic landscape on the European continent remains suspect. A report showed that German business confidence is at the weakest level since 2014. Perhaps more ominous is the index for future expectations also worsened with manufacturers fingering trade tensions for the cloudy outlook.
The British pound has taken advantage of a weakening dollar since last week but was unable to capitalize so far this morning. Politics continue to dominate British headlines as the campaign to replace Prime Minister Theresa May heats up. Jeremy Hunt has become the favorite to join Boris Johnson in the final two to compete for 10 Downing Street. Hunt made things personal by calling Johnson a coward for not appearing in public debates. For his part, Johnson repeated that “we must and we will” leave the EU on October 31st.