Mostly a positive week for the U.S. dollar as traders didn’t get the ultra dovish Fed statement many were hoping for, but price action diverged among dollar pairs after a surprise announcement from the U.S. on new tariffs on Chinese goods hit the wires on Thursday.
United States Headlines and Economic data
- Our Fed does nothing’: Trump attacks the independent central bank days before policy meeting
- Former Fed Chair Janet Yellen says she’s in favor of an interest rate cut
- Dallas Fed manufacturing index shows factory activity continued to expand in July
- Lighthizer Says Vietnam Must Cut Its Trade Surplus With U.S.
- US consumer spending, prices rise moderately
- U.S. Core Inflation Firms as Fed Gathers for Expected Rate Cut
- Annual home price gains dip to 3.4% according to S&P CoreLogic Case-Shiller Index
- U.S. Consumer Confidence rebounds in July to 135.7 vs 125 expected
- Pending home sales beat expectations, breaking 17-month losing streak, thanks to lower mortgage rates
- U.S. employment cost index increased 0.6%, seasonally adjusted, for the 3-month period ending in June 2019, vs. 0.7% in the previous period
- Latest U.S.-China trade talks ‘constructive’, Beijing says
- Trade talks to continue in September in the US, Chinese state media says
- Private payroll growth tops estimates as job market shows signs of tightening
FOMC monetary policy meeting: Fed cuts rate by a quarter point, cites ‘global developments,’ ‘muted inflation’
- The FOMC lowers the target range to 2.00% – 2.25% from 2.25% – 2.50% with two dissenting votes from the committee; the first rate cut in a decade.
- The Fed did not hint at future rate cuts, which sent the markets in risk-off mode as there was hope by some for more cuts before the end of the year. This was later walked back somewhat with commentary that the Fed will “act as appropriate to sustain the expansion,” leaving the door for more cuts if needed.
- U.S. weekly jobless claims rise; labor market still tightening
- IHS Markit US Manufacturing PMI: PMI falls to lowest since September 2009
- ISM Manufacturing PMI at 51.2 vs. 51.7 previous
- Trump announces new tariffs on $300 billion in Chinese goods – this event set global financial markets into fear and uncertainty mode as traders were caught off guard given the earlier rhetoric in the week that U.S.-China negotiations were ‘constructive.’ The Greenback’s price action diverged against the major currencies as it fell against the ‘safe havens’ (Swiss franc & Japanese yen) while rallying against the comdolls and British pound.
- U.S. July jobs report: Economy adds 164,000 jobs in July, unemployment rate sits at 3.7%
- U.S. factory orders increase 0.6% in June
- U.S. trade deficit in goods narrows in June as exports weaken
- Two Fed officials disagree with decision to cut interest rates
- US consumer sentiment index hits 98.4 in July, slightly topping June numbers
- Trump announces deal to expand US beef exports in the EU — and jokes about Mercedes, BMW tariffs