U.S. Dollar Down as Data Improve Elsewhere

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U.S. Dollar Down as Data Improve Elsewhere

MAY 21, 2021

The U.S. Dollar is trading in mostly tight ranges after staying within a half percent range all week with markets seeking direction. 

Overview

This week has been characterized by turbulence across global markets especially the crypt-currency world which has been crushed by announcements of regulation or just straight-up prohibition. Stocks are volatile, yields for treasury bonds remain subdued, and some economic indicators have failed to even expand when it was expected. Nevertheless, this is all being taken as a sign of growing pains as we have given 279 million COVID -19 vaccine shots in the U.S. and over 1.5 billion worldwide.

Purchasing Managers Index figures for May will be out at 9:45 AM and Existing Home Sales at 10 AM. We shall see how other developments may impact the market as the focus turns onto the U.S. corporate tax proposal and the International Monetary Fund is putting together a $50.0-billion program aimed at helping the world get rid of the coronavirus as the gap between advanced and developing nations remains large in many aspects.

What to Watch Today…

  • No major events scheduled for today

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EUR  

The Euro rose by 0.8% for the week as economic data pointed at a stronger recovery than expected with good PMI figures. The European Union will go ahead with vaccine certificates across the continent and announced that countries deemed safe will be allowed to travel without the need to quarantine. Greece and Italy should see a particularly large boost after losing close to 70.0% of their tourism in 2020. We shall see if Euro has more room to grow after the ECB made mention that there is no plan to really change its stance any time soon.

CAD  

The Canadian Dollar is about to close its seventh consecutive week of gains as it is sitting near around its strongest levels against the buck since May of 2015. Our neighbor’s COVID experience this entire time has played a major factor in helping CAD be among the strongest comeback assets after the USD hit its highest value in history in March 2020. As the Bank of Canada feels the economic indicators are steady, they seem more ready than anybody else to actually taper down the line, possibly increase interest rates. A very confident Canada and oil demand potentially increasing for the rest of the year could settle CAD in these ranges, but it has strengthened beyond what we foresaw.

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