Dollar Index at 4-Month; Yen Weakest In Nine Months

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Dollar Index at 4-Month; Yen Weakest In Nine Months

FEBRUARY 19, 2020

After rallying much of yesterday, the U.S. dollar was able to hold onto much of its gains overnight.

Overview

Indeed, the Bloomberg Dollar Index touched a four-month high this morning after solid economic data.  Core producer prices rose 0.5% in January, beating expectations of a 0.2% gain.  A separate report showed that building permits jumped 9.2%, smashing estimates of a 2.1% gain.

Today is also a busy day on the monetary policy front.  There are currently two Fed speakers giving talks at the time of writing, with three more scheduled for later today.  At 2 p.m., the FOMC will release the minutes from their last meeting.  Traders will look for comments from policymakers about the amount and timing of the expected withdrawal of liquidity measures in the repo-market.

What to Watch Today…

  • Fed Minutes at 2 p.m.

Complete Economic Calendar can be found here.

JPY

The Japanese yen is facing major selling pressure this morning and has lost 0.70% overnight.  The yen touched its weakest level in more than nine months against the U.S.  The safe-haven currency is losing on reports that China may be planning more measures to support parts of its economy that has been negatively affected by the coronavirus.  In addition, there are some reports that the spread of the virus may be slowing down, but we are not holding our breath. The death toll passed 2K overnight.

GBP

The British pound initially shot higher overnight but quickly ceded those gains.  The pound found support after a report showed that inflation accelerated, lowering expectations that the Bank of England will lower interest rates.  The inflation boost was the first gain in six months.  GBP/USD was unable to hold above a key technical and psychological level before restarting its fall against its American rival.NEWS & INSIGHTS

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