Dollar Extends Gains; 22-Month Best v. Euro
APRIL 25, 2019
The U.S. rallied yesterday and continued its positive momentum overnight following strong domestic data, weak foreign data and more dovishness from global central banks.
Overall, the greenback is at a four-month high.
This morning’s domestic economic docket will add to the argument for continued dollar strength. Durable goods orders, goods meant to last at least three years, beat expectations by rising 2.7% in March. A breakdown of the report showed that non-military capital goods excluding aircraft rose 1.3%, beating expectation of a 0.2% increase. With no further economic data set for release today, market participants will shift their attention to tomorrow’s Gross Domestic Product report.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
The Euro tumbled yesterday on general dollar strength and poor economic data reported in Germany. The IFO business survey was the latest example of warning signs for Europe’s largest economy. As a result, the EUR/USD fell to its lowest level in 22 months throughout yesterday’s session. The declines continued overnight despite a clear catalyst. The question now is whether EUR/USD will carve out a range at these newer, lower levels or if the dollar’s gains will be short-lived and we see a return to the familiar ranges seen most of April.
The greenback rallied the most against the Swedish krona after the Swedish central bank, Riksbank, extended its bond-purchase program and signaled rates would stay negative for even longer. In the last two days both the Bank of Canada and Bank of Japan held a dovish outlook for the global economy, boosting the greenback.