Dollar Up Modestly Ahead of Fed Minutes
APRIL 07, 2021
The U.S dollar eked out small gains against most of its G10 counterparts, halting four consecutive days of declines.
Global equities remain near record highs following a slew of positive signs, including strong U.S. data, expectations of central bank support, and brightening outlooks for the global economy. The IMF released fresh projections showing they expect the U.S. economy will expand 6.4%, significantly higher than the 5.1% estimated in January. The IMF attributes the upgrade to a faster vaccine rollout and the new $1.9 trillion stimulus package.
While the IMF and World Bank Group will continue their virtual spring meeting today, the biggest risk event on the calendar is the release of the minutes of the latest Federal Reserve decision meeting at 2 p.m. today. With no major economic data due out this morning, the greenback may hold tight ranges ahead of the minutes release. However, there are four Fed speakers sprinkled throughout the day which merit following.
What to Watch Today…
- Fed Minutes at 2 p.m.
The Euro opened this morning slightly lower against the U.S. dollar but the common currency is still solidly up this week. Indeed, the Euro was the best performing major currency during yesterday’s session and is up a full percent since Friday’s close. While Europe’s vaccine rollout has lagged behind the U.S., improvements are now apparent. For comparison’s sake, Bloomberg reports that half the adult population of Europe will be vaccinated by the end of June. At the current rate, 75% of the U.S. population will be inoculated by July.
The British pound is under pressure for a second straight day after reaching a two-week high on Monday. Now GBP/USD has fallen to a weekly low. The narrative remains similar to yesterday: traders have rising concerns over the nation’s vaccine rollout and Prime Minister Boris Johnson’s plan to reopen the economy, especially international travel. Our friends at Monex Europe also note that the U.K. will begin using the Moderna vaccine today, a full two weeks ahead of schedule.