U.S. Dollar Starts Better Off than Last Week, Quiet July Monday

 

 USD

The U.S. Dollar is trading in positive territory, holding on to the minor gains experienced at the end of last week once the employment Situation revealed a consistently improving labor sector. Regardless, most of the buck’s counterparts continue to be fluctuating around their strongest levels since last summer. Ultimately, the greenback will need to see stellar developments in consumption and perhaps signs of confidence from statements by Fed officials who’ll speak throughout the week.   

The G-20 summit came to a close with some minor policy progress, but highlighted by the growing difference in approach to problems such as North Korea and discord with climate change agreements between the U.S. and some of the global community. We shall see if central banks around the world continue to work towards tightening with the Bank of Canada meeting on Wednesday.    

 

EUR  

The Euro did not falter much after Friday’s good news out of the U.S. and is swimming around its highest levels since May of last year. This week brings individualized country data such as Industrial Production and Consumer Price Index figures from Germany, France and Spain that could move the needle in the shared currency’s favor if impressive. 

Economic indicators are the primary cause of the Euro’s recent surge, along with potential European Central Bank tightening. Any near-term suggestion that the continent is ready for a reduction in QE prior to the program’s full completion in December will certainly result in further Euro strengthening, which we feel, is possible for Q3.  

 

GBP  

The Pound slid at the end of last week and continued to flounder overnight based on, once more, poor economic numbers out of Britain and a gloomy Brexit future. Industrial output, manufacturing, and construction are indeed not just lagging, but also contracting. 

Furthermore, a study of what would occur if the UK were to pay World Trade Organization tariffs for EU-produced goods showed that an English breakfast would go up in price by close to 15.0% as things such as olive oil and orange juice could represent an additional 30.0% in importing costs.