U.S. Dollar up once more on recovery doubts
JULY 12, 2021
The U.S. Dollar is back to a favorable trend following a Friday of renewed risk appetite that pushed equities to new record highs.
This weekend turned the tables as news out of China presents an economy in slowdown mode, which bodes poorly for global recovery and the rise of other currencies elsewhere. Second-quarter growth for the world’s second-largest economy is set to grow by less than half of what it did in Q1 with expectations of just 8.0% when 18.3% was previously achieved. Expect volatility for Asian and other currencies, including the Oceanic Aussie and “Kiwi.”
Janet Yellen, Treasury Secretary, is working on a timeline for presenting to Congress parts of the corporate tax agreement reached by the finance ministers of the G-20. In order to work towards a more just tax system, the members are hoping to implement a minimum 15.0% tax for corporations as well as other measures. Simply put, it will be in the hands of American lawmakers to commit to this initiative and the Biden administration is weighing what it will have to do. We will also monitor how the situation in Sydney goes as new flare-ups caused new lockdowns.
What to Watch Today…
- No major economic events scheduled for today
IT’S A ‘THREE-PEAT’ | Top MXN Forecaster for Last 3 Quarters
The Euro is trending weaker as the European Central Bank seems set to leave loose policy for a long time. ECB President Christine Lagarde explained that she is just cautiously optimistic about the economic growth of the Euro-zone since new coronavirus variants seem to be getting in the way of global trade and renewed activity. She also said she expects things to remain in place until the end of Q1 2022, especially since it is likely more forward guidance is needed as well as new measures, programs to aid the financial environment, which is looking still quite fragile.
The U.K. is hoping to open up fully in seven days after having to delay because of an increase in infections as new variants have appeared to affect the population. Nevertheless, plenty of the population is vaccinated by now and after demonstrations demanding to loosen up the restrictions, seems Britain will start enjoying the wonders of no masks and no social distance. Expect volatility for the Pound as activity supposedly flourishes and issues with trade start being discussed again.