Dollar Extends Gains Early on Bullard’s Hawkish Comments

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Dollar Extends Gains Early on Bullard’s Hawkish Comments

JUNE 18, 2021

After a very busy and volatile 36 hours after the Federal Reserve meeting, markets were largely quiet to start the day.

Overview

The U.S. dollar is holding on to its impressive gains seen since Wednesday afternoon and the Bloomberg Dollar Index is at a two-month high.

There is no economic data on today’s docket. However, the dollar is seeing some early strength as Fed policymaker James Bullard speaks.  The headline that is likely driving the pop in the dollar is “Bullard says His Dot Reflects Liftoff in 2022”.  Bullard also said that Fed Chairman Powell officially opened taper discussion this week.  Add his comments to the Fed’s hawkish stance this week.

Yesterday, President Joe Biden signed Juneteenth into law as a federal holiday celebrating the emancipation of African Americans who had been enslaved.  Tempus will be honoring the day but because the holiday is not yet a “market holiday” we will have full coverage for clients until 5 pm EST, per a normal Friday.

What to Watch Today…

  • No major economic events scheduled for today

View Economic Calendar

AUD  

The Australian dollar remains under pressure against the U.S. dollar.  The Aussie got a bit of relief overnight after influential Westpac economists Bill Evans predicted the central bank will raise rates by early 2023.  The Aussie’s modest recovery proved to be short-lived.  AUD/USD is now trading at the lowest rate since December 2020.  The Aussie is down 3% from this time one week ago.

GBP  

The British pound continues its downward trajectory versus the U.S. dollar.  With the backdrop of broad U.S. dollar strength, the pound is suffering as worries about the resurgence of Covid cases darkens the outlook for the British economy.  The U.K. registered 11K new cases of the disease, threatening to cause officials to again delay the full reopening of the economy.

The British pound is down 2% from a week ago and is currently trading at the worst level since May 4th.

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