Dollar Flat Ahead of Data; Pound Falls After BOE
JUNE 24, 2021
The U.S. dollar index is a touch lower this morning with the greenback in rather flat ranges against most of its major counterparts.
That may change soon today’s agenda is chock full of risk events. This morning’s data will likely set the tone for the day. Jobless claims are expected to fall back below 400K after a surprising rise last week. Durable goods orders and the third reading of first-quarter gross domestic product are due out at the same time at 8:30 a.m.
On the political front, we will be watching developments over the $559 billion bipartisan infrastructure plan. Both Democratic and Republican senators will present their plan to President Joe Biden today. Lawmakers are hoping to come to an agreement by Friday ahead of a two-week Senate break. If a deal is reached, market participants will then weigh what the plan will do to the inflation outlook. If the past is prologue, the news may break late after the markets are closed tomorrow.
The monetary docket is also jammed back with six Federal Reserve presidents scheduled to speak.
What to Watch Today…
- Jobless Claims, GDP, and Durable Goods at 8:30 a.m.
With busy calendars in both the U.S. and the U.K., the Euro is out of the limelight this morning. The Euro was able to find a bit of strength overnight after Germany’s IFO expectations came in higher than economists had expected. EUR/USD is likely to take its cues from U.S. economic data and general risk sentiment today. We have experienced choppy, sideways trading over the last few days and that could be on tap again today.
The sterling initially gained some ground overnight but has fallen half a percent in early trading following the Bank of England’s interest rate decision. The Bank of England voted unanimously voted to keep interest rates at 0.1% and 8-1 to maintain their current monetary stimulus. While no moves were expected today, the decision has been taken as “dovish.” The BoC pushed back against speculation that a fresh surge in inflation means that they were getting close to raising interest rates. The central bank also warned against “premature tightening” even as inflation rose above the Bank’s target for the first time in two years earlier this month.