The US dollar is firmer against most of the European currencies but is weaker within the dollar-bloc and many emerging market currencies. Against the yen, the greenback is little changed.
The US dollar has been pushed a more than a cent off the $1.0850 level approached before the weekend. Sterling’s push toward $1.5050 is a distant memory as it retreats to $1.4900 support.
The US dollar’s strong advance ended a month ago. Weak economic data encouraged investors to push out their expectations of the Fed’s first interest rate hike. Some are even shifting it out of 2015 entirely.
At the same time, economic conditions and lending improved in the Eurozone. The stabilization, and then recovery in the price of oil, has helped ease, on the margin, deflationary forces.
The US dollar fell against the major currencies and many emerging market currencies last week. Punished by disappointing data, it threatened to breakout of ranges that have confined it. However, the third consecutive upside surprise on core CPI helped the greenback stabilize ahead of the weekend. The price action reinforces our sense that after trending for several months, the dollar has entered a consolidative phase. Trading is choppy, and positioning stretched, but the divergence of monetary policy trajectories will likely prevent sharp dollar losses.
Five years ago, a fresh-faced leader of the opposition stood on the stage at a TED conference in London speaking to a gathering of technologists and entrepreneurs. His promise was to deliver the next age of government. David Cameron’s talk did not feature the words “austerity”, “immigration”, or “long-term economic plan”, but instead an optimistic vision of family, community, and smarter digital governance built on a technological revolution.
America’s poor response to the Asian Infrastructure Investment Bank has underscored the importance of the Trans-Pacific Partnership trade negotiations. A failure would risk hollowing out one of President Obama’s major strategic foreign policy initiatives–the pivot to Asia. A critical piece for both negotiations and Congressional approval is the granting of trade-promotion authority (aka fast-track), which allows for an up-down vote on the final agreement.
Global growth expects to slow in 2015 while the U.S. is seeing a rise in unemployment claims and disappointing indicators from the retail industry and small businesses market wide.
The key issue as the market heads into the weekend is whether the US dollar is breaking out of its trading range to the downside. Has the disappointing US economic data and the somewhat better European data finally taken its toll and forcing the dollar bulls to rein their enthusiasm?
Helped by the sixth consecutive advance in oil, the Canadian dollar extended its advance out of the three month trading range. A less dovish central bank had provided the earlier fuel.
Late last month the Senate passed a non-binding budget resolution that encourages the selling or transfer of federal lands to state and local governments. With a Republican Congress, the longstanding question over federal management of public lands is resurfacing once again with renewed urgency.
As ever in the run-up to a general election, Britain is seeing an increased interest in how the economy has been performing. The electoral fate of a government is often expected to relate directly to the state of the nation’s wallets. But as new evidence suggests, there may be more to it than simple financial indicators.
Political positions are no longer hereditary in modern democracies, but political dynasties nevertheless exist around the globe and dominate political office in East Asia and Japan in particular. But research shows that dynastic politicians in Japan can be socially inefficient and lead to less optimal and inefficient outcomes for their electorates.
