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Mid-Week Dollar Commentary: U.S. Dollar Pummeled after Powell Comments, Lower Preliminary GDP

By Jay and Julie Hawk of www.TheFXperts.com 

The U.S. Dollar Index (DXY) sold off sharply today and is currently trading at 96.72, down -0.64 after trading in the 97.50 region before Jerome Powell, Chairman of the U.S. Federal Reserve made comments the market considered dovish. In a speech entitled, “The Federal Reserve’s Framework for Monitoring Financial Stability” given at the Economic Club of New York, Powell said that, “My own assessment is that, while risks are above normal in some areas and below normal in others, overall financial stability vulnerabilities are at a moderate level.” In addition to the Powell speech, U.S. Preliminary GDP increased by only +3.5% q/q compared to an expectation of +3.6%, suggesting that U.S. GDP growth may have peaked last August at 4.2%.

Elsewhere, the RBNZ raised its loan to value (LVR) restrictions on new mortgage loans to cool down the New Zealand property market. Also, the BOE said that all UK banks passed stress tests and none would have to curb lending in the event of a “disorderly” Brexit. Tuesday’s highlights included U.S. CB Consumer Confidence, which printed at 135.7 versus the 136.2 expected, while Monday’s releases had the New Zealand Trade Balance show a deficit of -1.295B compared to -850M anticipated.

Looking ahead, Thursday’s highlights will feature the release of the FOMC Meeting Minutes, as well as the ANZ Business Confidence index (last -37.1) and Australian Private Capital Expenditures (1.1% consensus), plus a speech by ECB President Mario Draghi. Friday’s numbers include the Eurozone’s CPI Flash Estimate (2.1% consensus) and Canadian GDP (last 0.1%) expected . Friday will also be the first day of the G-20 Meetings in Buenos Aires, Argentina that will conclude on Saturday.

 

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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