Dollar Slips But Remains Strong; MXN Falls To 7-Month Low
JUNE 03, 2019
The U.S. dollar is mostly weaker against its G10 counterparts to start the week. Overall, however, the greenback still remains in favorable ranges across the board.
The Mexican peso dropped dramatically in early trading, extending its 3-day decline. A Mexican delegation led by Foreign Minister Marcelo Ebrard in in Washington today and said that imposing tariffs would be detrimental to both countries. MXN is at its weakest level since December.
Traders will look to this morning’s economic data to perhaps give the greenback renewed strength. There are also a number of Fed speakers today so market participants will look for clues on future policy. Fed Fund Futures are now pricing in a 97% chance the Fed will cut rates at least once in by the end of the year, up from 53% a month ago. While the dovish shift should have been dollar negative, the greenback continues to win the “less ugly” battle.
What to Watch Today…
- PMI and ISM Manufacturing Data
Complete Economic Calendar can be found here.
The Euro rose for the first time in five days as EUR/USD appears to have carved out a short-term floor. The bounce in the Euro comes even after German inflation data proved weak and registered at its lowest level in over a year. A separate report showed that euro-area manufacturing also contracted in May, adding to the gloomy outlook for the EU. The European Central Bank will conclude a two-day meeting on Thursday which may prove pivotal.
Political headlines out of the U.K. are plentiful this morning. President Trump’s Twitter feed got a workout before Air Force One even landed in Britain referring to the London mayor as a “cold stone loser.” Earlier in the weekend, Trump said Boris Johnson would be an “excellent” prime minister and touted Brexitter Nigel Farage. President Trump will meet Queen Elizabeth this week which maybe provide a distraction from the ongoing political battles within the Conservative party and the direction the party will take to attempt unify and lead the U.K. out of Europe once and for all.