US dollar rose against its major trading partners early yesterday as the focus turned to inflation and retail sales data for April as well as an appearance by Federal Reserve Chairman Jerome Powell.
Supporting the dollar long position was the U.S. and China agreement to step back from some of their tariffs on each other for a period of 90 days. The U.S. will temporarily drop its tariffs to 30% from 145%, and China will reduce its duties to 10% from 125%. The agreement has reduced trade war fears and repercussions on the global economy.
The 90-day pause in the trade war between the United States and China is driving a solid risk-on session to start the week, Scotiabank said.
Tuesday’s highlights will be the NFIB’s small business sentiment reading for April and the Consumer Price Index for April, as well as weekly Redbook same-store sales. The market expects an appearance by Powell on the topic of the Fed’s monetary policy framework review to guide market activities after Fed fund rates were held steady.
A quick summary of foreign exchange activity heading into Monday showed that USDEUR fell to 1.1084 from 1.1252 at the Friday US close and 1.1254 at the same time Friday morning.
There are no Eurozone data on Monday’s schedule. The next European Central Bank meeting is scheduled for June 4-5. GBPUSD fell to 1.3152 from 1.3307 at the Friday US close and 1.3277 at the same time Friday morning.
Bank of England policy board member Catherine Mann is due to speak, and UK same-store sales data are scheduled to be released at 7:01 pm ET this evening. The next Bank of England meeting is scheduled for June 19.
USDJPY rose to 148.1501 from 145.3252 at the Friday US close and 145.1101 at the same time Friday morning. The Japanese current account surplus narrowed in March, while Japanese services business sentiment declined in April, according to data released overnight. The next Bank of Japan meeting is scheduled for June 16-17.
USDCAD rose to 1.3981 from 1.3919 at the Friday US close and 1.3890 at the same time Friday morning. There are no Canadian data on Monday’s schedule. The next Bank of Canada meeting is scheduled for June 4.
