The United States Dollar appreciated slightly in overnight trading, taking advantage of the weaker risk-sentiment prevailing in global markets. The US Dollar Index (DXY) opens this morning at 95.90, down -10% from the Asian open even as commodity currencies bear the brunt of the risk-averse environment.
Monday was a subdued day on the economic calendar with little to excite markets, but some off-shore headlines moved the USD. China kicked things off early in the piece with officials offering some confidence boosting statements and policy measures. President Xi also added to the dialogue, vowing to provide unwavering support for the private sector and personal income tax cuts starting in 2019. Chinese stock markets surged on the news which saw the CNY bid upwards against the Greenback. The USD also benefitted from the turmoil currently roiling European markets as investors steered clear of the Sterling and Euro. Political concerns in Italy and the UK drove risk-aversion and saw the greenback strengthen against their cross-Atlantic rivals.
Moving into Tuesday, the United States Dollar enjoys another quiet day on the economic calendar with little to excite. Pundits will look to the headlines for further direction. The next driver domestically for the dollar will be this Fridays Q3 GDP reading from the States which is expected to show a moderation from Q2’s annualized 4.2% growth. Economists expect the data to show the purple patch the US economy has been enjoying may be coming to an end with a fall to 3.3% growth penciled in.