U.S. Dollar Down as Risk-Appetite Returns
MAY 25, 2021
The U.S. Dollar is trading in weaker ranges this morning as overnight sessions had exchanges in the green territory following dovish commentary from Fed officials.
Atlanta Fed President Raphael Bostic, a man likely to succeed Powell as chairman next year, and other heads of their respective branches stated that they do not feel price growth or inflationary pressures would last long enough to make an impact on the Fed’s thinking that the economy has a long way to go still before tapering in any way.
Guaranteeing an accommodative environment has not proven difficult for Fed members who share Powell’s resolve to see better numbers across all indicators, particularly labor and the reduction of Jobless Claims. Tomorrow we will see some crucial figures for Durable Goods Orders and Consumption while today we get New Home Sales and Consumer Confidence at 10 AM.
As the world continues to recover gradually, the MSCI Emerging Market Currency Index is less than half a percent away from its record peak. Beijing is making efforts to make sure commodities do not keep on spiking in price because of hoarding by some companies. Consequently, China’s CSI 300 rallied 3.0%. Expect these developments to create room for appreciation in petro-currencies along with the Antipodean Aussie and Kiwi. Today could prove to be a day of lows against some pairs for the dollar.
What to Watch Today…
- No major events scheduled for today
The Euro is up to its best level since January 7th based on the continent’s noticeable progress in combating COVID infections and increasing the number of those vaccinated. As central banks refuse to create any unnecessary costs for economic recovery, the Stoxx Europe 600 may be on its way to a brand-new record high. Meanwhile, diplomatic minds have come up with a plan to restrict Belarussian air flights and to avoid flights going into the Belarus air-space jurisdiction. The situation has the EU worried this is an attempt coordinated with Russian leadership, a charge Moscow is denying while saying Belarus should face all consequences civil air flight feels necessary.
Pound Sterling has less momentum than all other majors at the moment following comments from Bank of England’s Governor Andrew Bailey, who much like Fed members feels there is no need to be concerned about inflation coming in too hot just yet. Similar to the U.S., recent Consumer Price Index figures have come up double the estimate, but Bailey says April was not an indicator that price pressures will need to be addressed. As re-openings go on, GBP could see itself established in these ranges while coping with woes over keeping all U.K. members in line and post-Brexit healthy