Dollar Headed for First Weekly Loss in Four
AUGUST 09, 2019
The U.S. dollar as a whole was mostly flat overnight but the Bloomberg Dollar Index is heading for its first weekly decline in four.
The majority of developments were abroad overnight but there are still a number of happenings in the U.S. today that could cause some volatility.
On the trade front, the U.S. is holding off on a decision about licenses for American firms to restart doing business with Huawei Technologies. China has said it would halt farm purchases from the U.S. threatening a Huawei deal.
The economic docket showed that producer prices fell in July which will likely solidify the case for more Fed easing. Excluding food and energy, PPI dropped 0.1% from the prior month. The annual increase of 2.1% is the lowest in two years.
What to Watch Today…
- No major events scheduled for today.
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EUR/USD was mostly unchanged overnight despite more poor data out of the Eurozone. German exports had their largest annual decline in three years in June, adding to a recent slew of poor manufacturing data.
Political tensions in Italy are also prominent in the headlines this week. Italian bonds are tumbling as the chances of a snap election increase.
The British pound took a beating last night and fell to its lowest level versus the U.S. dollar since January 2017. The renewed sell-off was sparked by a report that showed the U.K. economy contracted for the first time in six years in the second quarter. Gross domestic product fell 0.2% in the second three months of the year, failing to meet expectations of a flat reading. If the U.K. fails to grow in the third quarter, the economy will enter a technical recession right at the new Brexit deadline. For this part, U.K. Chancellor of the Exchequer Sajid Javid shrugged off the idea that the economy might enter a recession but he did blame Brexit uncertainty for the downturn in the second quarter.