Dollar Falls to Multi-Month Lows on Raging Risk Sentiment

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Dollar Falls to Multi-Month Lows on Raging Risk Sentiment

Another day, another sell-off for the U.S. dollar. The Bloomberg Dollar Spot Index dropped again as demand for the greenback as a safe-haven continued to wane.

Overview

Asian and European equities rose more than 1% and American futures are solidly in the green. Notably, the Nasdaq 100 is within 1% of its all-time high. The greenback fell to numerous monthly lows against the Euro, Aussie and Kiwi.

There is a slew of data due out this morning.  First, ADP will release their private payrolls data at 8:15, with economists expecting the number to fall by 9M jobs in May.  The print may foreshadow Non-farm payrolls on Friday, clearly the largest economic print of the week. Economists expect unemployment to soar to 19.5% in May, the highest level since the Great Depression.

Later, PMI for the US is expected to follow Europe’s lead and show the economy is starting to rebound from the lows of March and April.  Separate reports are expected to show factory orders fell 13.4% in April and the final reading for durable goods In April declined 17.2%. Because factory orders and durable goods orders are looking into the past, the PMI data will likely carry more weight.

What to Watch Today…

  • PMI Data at 9:45 a.m.

Complete Economic Calendar can be found here.

HAPPY HALF-HOUR: JOIN US THURSDAY…

EUR

The Euro continued to march higher against the U.S., briefly breaking above a key psychological level before moderating somewhat. The common currency has gained for seven straight days, representing its best run since 2013.  Today’s bout of strength can be attributed to data that showed that economic activity in the Eurozone is recovering.

Eurozone PMI rose to the highest level in three months as the largest economies in Europe reopened. The Euro is receiving an extra bump from yesterday’s news that Germany is getting closer to finalizing a stimulus package. EUR/USD is at its highest level since March 16th

GBP

The British pound is also taking advantage of a falling U.S. dollar.  But the sterling is also seeing a boost on what is being considered some flexibility on the U.K.’s hardline position towards Brexit. Bloomberg reports that the EU will try to convince Prime Minister Boris Johnson to compromise later this month to avoid the U.K. leaving the bloc without a trade deal.

While the initial report is rather light on details, the market seems hungry for good news. GBP/USD is up for a fifth straight day, the longest winning streak in three months.

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