TALKING POINTS – US DOLLAR, EURO, ECB, FED
- US Dollar[1] pullback continues, but may struggle for follow-through
- Comments from ECB officials may cool speculation on QE cutback
- Clarida, Bowman confirmation hearings to inform Fed policy bets
The US Dollar edged cautiously lower against its major counterparts, extending two days of corrective weakness after the benchmark currency hit a four-month high last week. The pullback appears to reflect digestion after an upshift in the expected Fed rate hike path drove an aggressive rally from mid-April lows.
A dull offering on the US calendar offers little to reignite momentum but downside follow-through may still stall as investors look on to a week of data points burnishing the Fed’s relatively hawkish credentials[2]. News flow from Australia, Japan and the Eurozone is due to show tightening there remains far off.
A taste of what this looks like could come courtesy of comments from ECB officials Monday. Rhetoric suggesting the central bank is skittish about dialing back QE – a sentiment likely to be echoed by President Draghi later in the week – may hurt the Euro[3] and help the greenback by extension.
USD[4] sellers may likewise struggle to sustain momentum as markets withhold further conviction before hearing what comes out of Senate confirmation hearings for Richard Clarida and Michelle Bowman[5]. They are nominated to the Fed’s Vice Chair and community banking posts, respectively.
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ASIA PACIFIC TRADING SESSION
EUROPEAN TRADING SESSION
