Daily Currency Update

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The Greenback rises waiting for the ECB decision this Thursday

USD - United States Dollar

The U.S. dollar index increases 0.38 percent at the time of this writing as president Trump announced a bipartisan agreement to delay the debt ceiling and boost spending for the next two years. This delay avoids the risk of a debt default in September. However, the House has to approve the deal this week before members leave for a six-week recess. The new spending and limited savings in the plan will likely push the annual budget deficit over $1 trillion next year.

Furthermore, the U.S. dollar kept its bid tone from Friday with the ECB meeting this week and the change of leadership in the U.K. The Fed is poised to cut rates next week, and while the move is long overdue, it might present inflationary risks according to Bloomberg Opinion.

On the economic data release side, U.S. house prices rose 0.1 percent in May from the previous month, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). The previously reported 0.4 percent increase for April 2019 remained unchanged.

Key Movers

The bad news came from the IMF, which further decreased its global growth outlook, and suggested that policy "missteps" on trade and Brexit could hinder a rebound. The world economy will expand 3.2 percent this year and 3.5 percent next year, both down 0.1 percentage point from April projections. These new numbers are already the lowest since the financial crisis.

In the U.K., front-runner Boris Johnson has defeated rival Jeremy Hunt and is replacing Theresa May as both Conservative party leader and Britain's Prime Minister. In his victory speech, Johnson said he would prove his critics wrong and deliver Brexit. May will step down as Prime Minister on Wednesday. The focus for Johnson will be to take Britain out of the E.U., but his hard line strategy has plenty of critics. He also said he would work to, "…deliver Brexit, unite the country and defeat Jeremy Corbyn."

Expected Ranges

USD/CAD: 1.3100- 1.3190 ▲

EUR/USD: 1.1111 - 1.1206 ▼

GBP/USD: 1.2382 - 1.2458 ▼

AUD/USD: 0.6975 - 0.7015 ▼

NZD/USD: 0.6672 - 0.6720 ▼