Daily Currency Update

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Federal Reserve rate decision this Wednesday, a hold is expected.

USD - United States Dollar

The US dollar upturn stalled on Friday despite a stronger than anticipated first Quarter GDP print. The economy grew at a much quicker pace than analysts expected, growing at 3.2 percent in the three months to March 31. The Federal Reserves preferred inflation gauge was released this morning. The PCE index was stagnant and the yearly rate dropped from 1.7 percent down to 1.6 percent. It is the index's lowest rate since September 2017 and leaves little incentive for the FOMC to shift away from a cautious and dovish bias. Despite the softness across inflation, there are still signs the US economic growth story will continue through Q2.
Trade talks between China and the US will pick up again this week. Trade negotiators led by US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will meet with there counterpart Chinese Vice Premier Liu He on Tuesday. Market participants continue to be optimistic that a deal will be reached. Albeit over the weekend, Bloomberg News reported that a meeting on trade between President Trump and Japan's Prime Minister Abe showed an unwillingness for either side giving up ground on negotiations.

Key Movers

Attention this week will turn to the FOMC rate decision on Wednesday with exceptions of a hike meager, well in line with global central bankers of late holding and remaining dovish for 2019. Market participants expect a dovish stand from the Fed, as global central bankers have shown a synchronized hold on the pace of interest rate normalization, and global growth remains on a relatively firm footing. The Bank of England is also expected to hold on rates this Thursday, and they are scheduled for a rate decision also.

Expected Ranges

USD/CAD: 1.3445 - 1.3479 ▲

GBP/USD: 1.2905 - 1.2947 ▲

EUR/USD: 1.1143 - 1.1167 ▲

AUD/USD: 0.7031 - 0.7060 ▲

NZD/USD: 0.6648 - 0.6680 ▲