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The Greenback took an early hit as risk sentiment was strongly positive to start the week.  It couldn’t really recover from the weakness thanks to weak U.S. economic updates, continued expectations of unlimited support from the Fed, and rising tensions between the U.S. and China.

Overlay of USD Pairs: 1-Hour Forex Chart
Overlay of USD Pairs: 1-Hour Forex Chart
USD Weekly Performance from MarketMilk
USD Weekly Performance from MarketMilk

United States Headlines and Economic data

Monday:

Trump Aide Accuses China of Using Travelers to ‘Seed’ Virus
U.S. Homebuilder sentiment bounces back in May, after record plunge in April
Global risk sentiment started the week in the “on” position thanks to several catalysts: Moderna reports positive data on early-stage coronavirus vaccine trial, weekend comments from Fed Chair Powell to reiterate unlimited stimulus support, positive signs of the global economy returning to pre-covid levels. This was likely the reason for the net negative start for the Dollar on Monday, especially against the “risk” currencies like the comdolls.

Tuesday:

U.S. housing starts post record decline; permits slump
Over 4 million Americans are now skipping their mortgage payments
Fed’s Powell to urge Congress to ‘do everything’ it can to help those suffering amid pandemic
Fed’s Rosengren says U.S. unemployment rate could remain at double-digit levels by end of year
The U.S. dollar bounced higher during the U.S. session against the higher-yielding currencies as risk sentiment shifted negative on Moderna vaccine news and more U.S.-China tensions (US could delist Chinese companies).

Wednesday:

Trump threatens to cut off federal money for Michigan over mail-in voting
U.S. borrowers in hardship jumped in April: study
If U.S. can’t resolve public-health issues, there’s a limit on what the Fed can do to help – Fed Rosengren
Dallas Fed President Robert Kaplan says more fiscal help will be needed including aid to states
Fed debates longer-term crisis-fighting plan, minutes show
The Fed’s April meeting minutes detailed a potential 2nd-wave virus scenario that could drag on the economy into 2021
Fed’s Bullard Doesn’t See Coronavirus Second Wave as Major Threat
U.S. Weekly mortgage applications point to a remarkable recovery in home buying

Thursday:

McConnell: Beefed up unemployment benefits will not be in next coronavirus bill
Philly Fed manufacturing index shows continued weakness in May
U.S. Jobless claims total 2.4 million, still elevated levels but a declining pace from previous weeks
IHS Markit Flash U.S. Composite PMI: May sees further steep fall in output amid COVID-19 crisis


April U.S. home sales drop nearly 18%, while decline in inventory pushes prices to a record high
Risk sentiment moved negative on more U.S.-China tensions (White House report criticizes China’s economic policies, human rights violations) and weak U.S. economic updates during the U.S. session.

Friday:

Unemployment rose in all 50 U.S. states in April: Labor Department’s BLS
Risk sentiment continued in negative mode, once again U.S.-China tensions (China Will Fight Back if U.S. Intervenes in Hong Kong, Beijing Warns), and likely the catalyst for the Greenback’s slow grind higher during the Asian and London trading sessions.