Dollar Holds Gains Ahead of Busy Week

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Dollar Holds Gains Ahead of Busy Week

APRIL 29, 2019

The U.S. dollar was range-bound overnight, holding on to its impressive gains the week prior.

Overview

The Bloomberg Dollar Spot Index rose 0.6% last week and the greenback overall is on track for its third consecutive monthly gain.

This morning’s economic docket showed more good news for the U.S. economy.  Consumer spending, which accounts for about 70% of the U.S. economy, rebounded in March. Spending increased 0.9% beating expectations of a 0.7% gain.  Not all was rosy, however, as personal income only increased by 0.1% in March.  The report also showed that underlying inflation is still low, allowing the Federal Reserve to leave its policy in place.  Excluding food and energy, the Fed’s preferred core-price gauge read 0.0%.

Chinese-U.S. trade talks will restart on Tuesday in Beijing.  While both sides have held a positive tone, there are still significant issues that still need to be addressed.  Wait-and-see continues to be our approach.

Japanese markets will remain closed all week for Golden Week holidays.

What to Watch Today…

  • No major events scheduled for today.

Complete Economic Calendar can be found here.

EUR

The Euro was able to stop the bleeding on Friday and into this week after reaching the lowest level in two years versus the U.S. dollar early last week.  The Euro found modest support after S&P left Italy’s credit rating unchanged on Friday as many expected the embattled country to face a downgrade.  Italy’s rating is still just BBB, which is the lowest investment grade. Attention is likely to shift to tomorrow’s Eurozone GDP.

GBP

The Sterling was mostly unchanged and remains near the bottom of recent ranges against the U.S. dollar.  News on the Brexit front is light, but there is plenty more on the docket to keep traders busy.  Manufacturing data will be released on Wednesday before construction data and local elections on Thursday.

The marquee event of the week will be Thursday’s Bank of England interest rate decision.  While rates are likely to remain unchanged, the Bank will release their economic projections.

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