Blog Posts, Forex, Market Reports

Mid-Week Dollar Commentary: U.S. Dollar at Nine Week High, While Loonie Gains on BOC Rate Hike

By Jay and Julie Hawk of www.TheFXperts.com 

The U.S. Dollar Index (DXY) soared to a nine week high against most foreign currencies this morning, trading at 96.21, up +0.50 as of this writing. The European currencies were hit hard after Eurozone PMIs failed to meet expectations that suggested looser monetary policy may be forthcoming from the ECB.

In particular, German Flash Manufacturing PMI printed at 52.3 versus an expectation of 53.4, while German Flash Services PMI showed a reading of 53.6 compared to an expected 55.5. In addition, EZ Flash Manufacturing PMI printed at 52.1 versus the 53.0 anticipated, and EZ Flash Services PMI showed a reading of 53.3 compared to the 54.5 expected, while French Flash Manufacturing PMI came out at 51.2 versus 52.4 anticipated. The only PMI number that beat expectations was French Flash Services PMI that showed a reading of 55.6 compared to an expectation of 54.7.

Also pressuring the Euro was the standoff between the Italian government and the EU on the 2019 Italian deficit target.  Sterling remains weak after Brexit talks stalled just five months before the UK is set to leave the European Union.

Elsewhere, the Canadian Dollar gained ground after the BOC raised the benchmark Overnight Rate from 1.50% to 1.75%. In the BOC’s rate statement, the central bank noted that, “The new U.S.-Mexico-Canada Agreement (USMCA) will reduce trade policy uncertainty in North America, which has been an important curb on business confidence and investment. However, trade conflict, particularly between the United States and China, is weighing on global growth and commodity prices.”

Looking forward, Thursday will feature the ECB’s Main Refinancing Rate Decision and Press Conference, and U.S. Durable Goods Orders and Core Durable Goods Orders are also due out. The week will wrap up with Friday’s release of U.S. Advance GDP and a speech by ECB President Mario Draghi.

 

Disclaimer:

TheFXperts’ Forex MarketWatch Reports are provided strictly for educational purposes and represent the opinions of the authors. No recommendation or endorsement for specific financial trading or investment purposes is offered. Subscribers are advised to seek financial, business and legal guidance from licensed professionals.Visit TheFXperts’ official website at www.TheFXperts.com.  You can also view and purchase Jay and Julie Hawk’s six financial books at Jay’s Amazon author page here: amazon.com/author/Jayhawk

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