U.S. Dollar a Winner Ahead of President’s Day Weekend

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U.S. Dollar a Winner Ahead of President’s Day Weekend

FEBRUARY 14, 2020

The U.S. Dollar has gained about 1.0% since the start of the month, according to the Bloomberg Dollar Spot Index, mainly as a result of a steady domestic economy while havoc ensues around the rest of the world.

Overview

Volatility overnight slowed a bit as all eyes continue to be on China as it is clear the virus is not done causing damage.

Stocks and futures declined slightly as the Federal Reserve Bank of New York announced they would be reducing their repo purchases, which many analysts were accrediting for the recent surges across equity markets. It seems like the buck and American economy have less to prove even as companies such as Mattel are already announcing delays in production from the virus situation.

This morning’s data primarily focused on Retail Sales for January, which revealed the expected 0.3% pace of growth. We will see if there is improvement in consumer sentiment from the University of Michigan survey at 10AM. Today’s Valentine mood could prove a distraction and maintain markets quiet ahead of a holiday weekend with U.S. Presidents’ Day on Monday. In observance, Tempus will be closed.

What to Watch Today…

  • University of Michigan Consumer Sentiment 10AM

Complete Economic Calendar can be found here.

EUR

The Euro declined 2.2% thus far in February following a deluge of poor data and pessimism pressuring the shared currency down to is weakest point in three years. Gross Domestic Product growth in Q4 for Germany and the bloc as a whole showed what was expected: 0.0% for Germany and 0.1% overall.

The lack of activity is worrisome and now with effects to manifest themselves from the coronavirus delays and disruptions, the continent could truly fail to flourish much this year. A recovery will need to be quite robust and chances of that are looking slim at the moment. We shall see if the next half of the quarter there a turnaround is.

GBP

As soon as it goes up, the Pound starts crumbling back down and so on. Once more, there are doubts brewing about how successful can a shake-up in Boris Johnson’s cabinet be in persuading the EU to concede much over trade and financial equivalence. The new Chancellor of the Exchequer will be Rishi Sunak.

His appointment and other heads rolling are making some economists worry that the government may not stick to fiscal rules that demand the day-to-day expenditures as well as revenue to be balanced within three years. We shall see further swings for Sterling as all types of separation issues are sorted out.

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