US Dollar Tries to Recover After Plunge Against Top Currencies
- US Dollar steadies after hitting 10-month low vs. major currencies
- Euro may shrug off CPI revision as ECB rate decision looms large
- Lull in top event risk, neutral risk trends make for clouded outlook
The US Dollar traded broadly higher to start the week. The move appeared to be corrective following Friday’s sharp selloff amid cooling Fed rate speculation in the wake of another round of disappointing economic data. The yield-sensitive Australian and New Zealand Dollars suffered outsized losses, tellingly dropping as US front-end rates edged up after touching a monthly low in the prior session.
The finalized set of June’s Eurozone CPI figures headlines an economic calendar sprinkled with minor releases, none of which seem likely to generate fireworks. Absent a major revision from flash estimates, the numbers may pass the Euro by as traders wait for the upcoming ECB policy announcement before making strong directional commitments.
Sentiment trends might have been expected to take center stage in such a situation, but here too, indecision prevails. Conviction seems thin on European bourses in early trade and S&P 500 futures are effectively flat, hinting at the absence of a strong lead into the opening bell on Wall Street. This may translate into a quiet session, though headline sensitivity might be elevated.
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** All times listed in GMT. See the full DailyFX economic calendar here.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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