No love for the Greenback this week thanks to a steady stream of weak U.S economic updates, positive sentiment on economic re-openings, and rising geopolitical tensions with China.
United States Headlines and Economic data
Tuesday:
Broad positive risk sentiment (continued recovery hopes and vaccine development news) was likely the driver for the dollar’s broad move lower, starting in the Asia session. It’s also likely the rising tensions between the U.S. and China over Hong Kong (China warns US against sparking Cold War, U.S. Moves to Audit Chinese Firms. Market Frets Over What Comes Next.) were volatility drivers as well.
U.S. Consumer confidence for May rises to 86.6, vs 82.3 expected
US home price growth picked up in March despite COVID-19
New U.S. home sales rise slightly in April despite coronavirus-related shutdowns
Fed’s Bullard warns prolonged coronavirus lockdown could trigger an economic depression
Fed’s Bullard Sees Jobless Rate Returning Below 10% by Year-End
Dallas Fed Survey: Texas manufacturing sector continues contraction
Philly Fed May 2020 Nonmanufacturing Business Outlook Survey shows continued weakness.
Wednesday:
Richmond manufacturing index rose from a record low of −53 in April to −27 in May
Fed’s Beige Book says businesses are pessimistic about pace of a recovery
Texas service sector activity in March and April showed signs of abating in May
Fed’s Bullard: Expanded unemployment pay not appropriate as recovery takes hold
Strong rally in the Greenback against the majors, this time as traders retreated to the U.S. dollar as a safe haven as risk sentiment shifted negative, this time possibly on geopolitical tensions rising (e.g., U.S. weighs sanctions on Chinese officials, firms over Hong Kong, China approves controversial national security bill for Hong Kong).
Thursday:
U.S. initial jobless claims rise 2.12 million in latest week while continuing claims decline
Durable-goods orders plunge 17.2% in April vs. forecasts for 18.2% drop
U.S. Pending home sales plummet in April, but demand is showing signs of a rebound
Along with the weak U.S. economic updates, it’s likely the broad move lower in the Greenback against most of the majors during the London / U.S. session overlap was likely due to the continued positive global risk sentiment, which may have stemmed on this session from Europe as the bigger-than-expected recovery fund proposal may be brightening up the outlook in Europe.
Friday:
Fed’s Mester says it’s hard to imagine quick V-shaped recovery
US Personal income surges 10.5% in April on the back of government relief payments but spending lags
US Trade deficit in goods widens to $69.7 billion in April, advanced data show
UMich consumer sentiment rises to 72.3 in May from 71.8 in prior month
Next coronavirus stimulus bill will be the ‘final’ one, Mitch McConnell says
Trump orders his administration to begin eliminating Hong Kong privileges