Home Daily Commentaries Greenback trades in a narrow range following extremely quiet global equity markets

Greenback trades in a narrow range following extremely quiet global equity markets

Daily Currency Update

USD - United States DollarThe US dollar index is weakening this morning by 0.05 percent. The FX market is quiet globally, just like it has been in Asia and Europe. All of these FX markets were trading flat, as well as the North American global equity indexes. One of the highlights this weekend was the IMF/World Bank meeting that ended with an air of optimism. Despite that the IMF reduced its projection for world growth. There continues to be low risk of a downturn. There was an interesting development this weekend. European Central Bank President Mario Draghi made a surprising comment regarding whether President Donald Trump is undermining the independence of the Federal Reserve. Speaking to reporters at the IMF meetings in Washington, Draghi mentioned that he is “…certainly worried about central bank independence” and especially “…in the most important jurisdiction in the world.” However, and probably by coincidence, Trump again attacked the Fed a day after on Sunday. Trump tweeted the following: "…if the Fed had done its job properly, which it has not, the Stock Market would have been up 5,000 to 10,000 additional points, and GDP would have been well over 4% instead of 3% with almost no inflation. Quantitative tightening was a killer, should have done the exact opposite!"The US dollar had a muted reaction. However, the reaction and response from Fed officials remains to be seen.

Key Movers

Mario Draghi expressed confidence that the Eurozone would bounce back, saying some of the aspects that have retained growth appear to be abating. Chief Economist Peter Praet, a member of the ECB's executive board, said there are good reasons to consider that the circumstances are stabilizing after an economic deceleration forced the ECB to announce exceptional support and delay rate increases beyond this year. There is a disagreement on the board of the ECB over how to handle the negative rates, as at least one member thinks there is no need for tiering rates to help out banks.

Expected Ranges

  • USD/CAD: 1.3272 - 1.3385 ▼
  • EUR/USD: 1.1285 - 1.1351 ▲
  • GBP/USD: 1.3075 - 1.3136 ▲
  • AUD/USD: 0.7162 - 0.7200 ▲
  • NZD/USD: 0.6723 - 0.6790 ▼