The USD softened over the weekend as risk sentiment again shifted against the Greenback. The US Dollar Index (DXY) opens this morning at 95.64, reflecting a small retreat of 0.36% that was mostly driven by the headlines out of Europe. Nevertheless, the Greenback remains mostly unchanged against most of its counterparts.
The movements on Friday were primarily motivated from off-shore forces but the US Dollar did see some domestic impacts as well. Starting in Asia, China’s GDP figures were released to the downside, dampening fortunes for the AUD, NZD and CNY and supporting the Greenback. Adding fuel to the trade war fire are reports that Treasury Secretary Mnuchin is open to changing how the US determines which nations are manipulating their currency in a naked grab for leverage against China. In Europe, Brexit negotiations are reportedly 90% done which buoyed the EUR and GBP over the weekend. The EU and the US are also set to review their trade ties with US President Trump notifying Congress last week that he intends to begin official trade talks with the EU. Domestically, the United States enjoyed a small jump in equity markets which also helped the Dollar stave off further losses. Overall, the Greenback has traded within a tight range for much of Friday as markets wait to see how these stories develop.
Moving into the start of a new week, the USD is set to enjoy a quiet day on the economic calendar with the focus firmly fixed on the headlines for direction.