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The US dollar gets a boost from Fed official's speeches

USD - United States Dollar

The US dollar index increases 0.17 percent this morning following news that the Trump administration would be allowed temporary exemptions to an export blacklist against Huawei Technologies. Indeed, the US stock market trades to the upside this morning with this more positive news. It seems like the US dollar is benefiting from this sort of midpoint between a full-on trade war scenario and a full-resolution of the trade dispute.

The US dollar also got a boost following speeches by Fed officials. Yesterday in Atlanta, Fed chair Powell said that business debt is rising, but it does not pose a threat to the system. He added that problems could occur if the economy weakens, but banks are in a position to handle any unexpected issues. On Monday, Fed Vice Chair Richard Clarida also said that the US labor market may not be operating beyond "full employment" even with a 3.6 percent jobless rate, suggesting little concern about potential inflation.

US existing home sales data for April published this morning came in at 5.19 million, representing a minor decline in April of 0.4 percent, while the estimate was at 5.35 million.

Key Movers

The OECD cut its forecast for the world economy to 3.2 percent from 3.3 percent, insisting that governments resolve their trade disputes (US-China trade war) because they threaten to crimp global growth.

Last night, the RBA accepted the reality of a slowing Australian economy, with substantial weak inflationary pressures consistently below target and stagnant wage growth. RBA's Lowe said that the board would consider the case for a rate cut in June. The AUD/USD dollar and almost all AUD crosses are erasing all the gains seen Monday after Morrison's miracle.

A 2nd referendum was floated in the UK, and market participants are expecting UK Prime Minister Theresa May to unveil a new proposal for getting her Brexit deal through Parliament. The GBP/USD pair bounced 68 pips this morning from 1.2686 to 1.2754 at 7 in the morning Est.

Expected Ranges

USD/CAD: 1.3380 - 1.3432 ▼

EUR/USD: 1.1167 - 1.1207 ▲

GBP/USD: 1.2760 - 1.2866 ▲

AUD/USD: 0.6853 - 0.6909 ▼

NZD/USD: 0.6495 - 0.6530 ▼