Dollar Down as Economic Docket Impresses

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Dollar Down as Economic Docket Impresses

APRIL 15, 2021

The U.S. dollar was mostly unchanged against most of its G10 rivals overnight ahead of a slew of data and Fed speakers. 

Overview

Overall, the greenback has been under pressure this week and the Bloomberg Dollar Spot Index is at its lowest level since March 3rd.

Risk sentiment is stable as an impressive earnings season continues, even as news broke that the U.S. government will issue new sanctions against Russia.  While the Russian ruble and Russian bonds are in a free fall, U.S. indexes remain at or near record highs.

It is a big day for U.S. economic data and boy have the numbers been impressive! U.S. retail sales increased 9.8% in March, nearly doubling the 5.8% expected by economists.  The print is the biggest advance in 10 months as the economy reopens, vaccines get into people’s arms and stimulus checks hit American’s accounts.  U.S. weekly jobless claims also improved, dropping to 576K last week.  Both the New York Fed Empire Index and the Philly Fed Index soundly beat expectations.  As a result, stock futures are rallying, and the dollar is losing a touch.

Later, industrial and manufacturing production for March will be released followed by February business inventories at 10 a.m.  The Fed’s Bostic, Daly, Logan, and Mester are all due to speak today and add to a busy docket.


What to Watch Today…

  • Industrial and Manufacturing production at 9:15 a.m.

View Economic Calendar

EUR  

The Euro pushed higher against the U.S. dollar and touched a one-month high yesterday.  The common currency has since given back some of those gains but still trades near the top of recent ranges.  However, because the Euro has unable to break above a key technical and psychological level against the dollar, some analysts argue that the Euro’s recent rally is losing steam.  The fate of EUR/USD in the near term might be at the mercy of the vaccine rollout in Europe.  Despite issues with the Johnson & Johnson and AstraZeneca jabs, there is evidence the vaccine rollout is picking up steam in the EU which has boosted the common currency.

CAD  

The Canadian dollar was one of the biggest winners overnight with only a 0.2% gain against its American rival as most pairs held tight ranges.  In addition to a busy economic docket in the States, Canada will also see results that are worth watching.  The loonie is falling slightly after a report showed that Canadian factory sales dropped 1.6% in February, worse than the -1.0% expected.  Later, existing home sales are expected to show a 6.6% month over month rise in March.

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