Global trade tensions & positive economic data had traders feeling the Greenback until the U.S. announced a surprise tariff on Mexico that sent the dollar reeling into the weekend.
United States Headlines and Economic data
- Trump concludes Tokyo visit as Japanese trade official plays down August deal chances
- The Conference Board Consumer Confidence Index improved in May to 134.1, up from 129.2 in April
- US Home-price gains are weakest in 7 years, and that’s a good thing, Case-Shiller says
- First-quarter U.S. economic growth up 3.1%, better than Wall Street expected
- In the U.S., the international trade deficit in goods & services increased to $50.0B in March from $49.3B in February (revised)
- Fed’s top Wall Street regulator says interest rates not best tool to stop financial panics
- Fed’s Quarles says financial stability not main goal of monetary policy
- Fed’s Clarida says no need for rate cuts unless economy weakens
- Trump Says U.S. Will Hit Mexico With 5% Tariffs on All Goods – This surprise event from the U.S. sparked global risk aversion sentiment as it comes just a few hours after the U.S. administration submits its already agreed trade deal with Canada and Mexico to Congress for approval. Changing the terms on a whim is likely read by the global community that trade deals with the U.S. aren’t something to be relied upon, and this is arguably further de-motivation for China to lock up a deal with the U.S., hence the risk-off behavior. This hit the U.S. dollar pretty hard throughout out the Friday session as this situation likely means weaker economic conditions, which prompted speculation that the odds of Fed rate cuts are rising.
- U.S. Consumer Sentiment Pares Earlier Gains From May
- U.S. Personal income increased 0.5 percent in April after increasing 0.1 percent in March
- The MNI Chicago Business Barometer increased by 1.6 points to 54.2 in May from 52.6 in April
- Fed’s Williams sees case for aggressive action when steep downturns loom