Monex: Dollar verder onder druk

Monex: Dollar verder onder druk

Valuta
Ranko Berich_main.jpg

Hieronder volgt een kort commentaar in het Engels van Ranko Berich, Head of Research bij Monex Europe op de Amerikaanse dollar, euro en het Britse pond.

EUR
The euro reached fresh highs against the dollar this morning as fiscal stimulus delays, US-China tensions, disappointing US data and election uncertainty continue to weigh on the dollar. In the eurozone, the EU’s “frugal four” governments are in the spotlight again as they battle to protect their share of rebates from the EU budget. The countries argued that the value of their cashbacks risks wearing away in the current low growth and inflation environment caused by the pandemic. They therefore aim to index their prized rebates by 2 per cent a year to prevent the real value decreasing over the seven-year budget. Since Brexit, rebates have left a bitter taste in everyone’s mouth and caused France and the European Commission to lead a push for all rebates to be abandoned after Brexit. The value of the rebates is among the outstanding issues in the bloc’s stimulus package and budget deal that have to be finalised in the coming months and may put pressure on the euro. Today’s economic calendar is blank for the eurozone, which leaves the currency’s price action in the hands of broader risk sentiment.
USD
The dollar took yet another step down yesterday, with the Bloomberg dollar index falling to its lowest level since 2018, before the worst escalation in Donald Trump’s trade war with China. Most major currencies were up against the greenback, with the Japanese Yen and Pound Sterling registering the biggest gains overnight. Talks between Senate Republicans and Democrats over new fiscal stimulus remain stalled, with the former reportedly planning to introduce a scaled-back bill this week that will reportedly include funding for the US Postal Service. Any proposed legislation will face significant obstacles, as wide rifts remain between the two parties on a number of issues, despite increasingly dire warnings from Fed officials about the need to restore unemployment support. Yesterday’s data included the New York Federal Reserve’s business conditions index, which dropped from 17.2 to 3.7, back towards the 0 level that indicates no reported expansion. 34% of respondents said business conditions were improving, while 30% reported declines. Manufacturing conditions also deteriorated, with expectations for future business falling to 34.3. Today at 13:30, housing starts and building permits data will be released.
GBP
Sterling continues to make ground in an improving risk climate today, rising to levels not seen since early March, as UK and European officials resume face-to-face talks today. Boris Johnson’s top negotiator, David Frost, will discuss a path to a deal with Michel Barnier today with just seven weeks to find clarity over the future trading relationship. With Brexit uncertainty still looming, the pound’s gains may begin to meet resistance, especially as the October 2nd deadline approaches, but for now broad USD weakness is helping sterling rise back to pre-virus levels. Today, there is little scheduled data wise ahead of tomorrow’s CPI reading.