U.S. Dollar Slightly Weaker Ahead of Major Data Week

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U.S. Dollar Slightly Weaker Ahead of Major Data Week

MARCH 22, 2021

The U.S. Dollar is trading in familiar ranges with a slight bend towards depreciation as markets get ready to digest plenty of data to close the month after an eventful last week. 

Overview

The Federal Reserve’s determination to let markets and economy grow without intervention has certainly aided the global outlook and the vaccines administered across the U.S. give hopes of Summer re-openings in more than just Florida. Nevertheless, the rest of the globe’s fight has been uneven and there are still news items related to difficulty in dealing with new variants. The U.S. unlike in Q4, is now in a position to start helping others in order to get a more balanced resurgence that will be needed to fix many of the issues that have exacerbated with the pandemic and shutdowns negatively impacting activity.

AstraZeneca is trying to be used in Europe and is likely going to be approved as another option in inoculations here in the U.S. Conflict on the other side of the pond is making the roll-out of any vaccine a problem as trade issues have been brought to light. This week we will watch out for further commentary from the eds Jerome Powell as well as Treasury Secretary Janet Yellen as they talk to the Bank of International Settlements. We will also keep an eye on new announcements that may come from Biden’s administration about tax targets and revenue-generating goals to make an ambitious agenda of spending possible.


What to Watch Today…

  • No major events scheduled for today

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EUR  

The Euro is moving within the same 50-point band it was at the endo flat week, struggling to find clear direction as a new conflict with the U.K. is putting the whole Old Continent under major pressure. Indeed, the EU officially withheld exports of vaccines to the United Kingdom accusing the British of breach of contract. As this gets settled or blows up, both the Euro and Pound face concerns with both economies struggling to come out of the hole they have been since the end of last summer, when things looked brighter and resolution more attainable. The regression and conflicts brewing up are worrisome.

GBP  

The Pound is losing some ground based on the news item described above. As the economy of the U.K. shows sluggishness and there are delays in getting everyone vaccinated, expect GBP to start sliding from its post-Brexit surge with trade and economic activity compromised. The pandemic slowed things down, but this new issue threatens the Bank of England’s forecast for growth. Diplomatically a lot will need to happen and Prime Minister Boris Johnson is expected to speak directly to France’s Macron and Germany’s Angela Merkel as well as EU leadership making headlines with their intervention.

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