USD - United States Dollar
The standard U.S. dollar index had another positive day soaring over 0.2 percent. And while U.S. President Donald Trump lamented its strength on Twitter (calling on the Fed to cut rates by 100 basis points), the Bloomberg index of the U.S. currency went to its highest level of 2019. The main difference between the two U.S. dollar indexes is that the latter has more emerging market components, such as the Mexican Peso, which plunged to its lowest level since December 2018. The Euro component represents around 58 percent of the standard U.S. dollar index, which is why the standard U.S. dollar index has not touched new highs in 2019 yet.
Eric Rosengren, President of the Federal Reserve Bank of Boston, continued to push back against further interest-rate cuts by the Fed, arguing he's not convinced that slowing trade and global growth will significantly depress the U.S. economy. He said, "…we're likely to have a second half of the year that's much closer to 2 percent growth." He added "I'm not saying there are no circumstances in which I'd be willing to ease, I just want to see evidence we are going into something that is more a slowdown." Rosengren, a voter this year on the Federal Open Market Committee, was one of two officials who dissented when the panel cut rates on July 31st. Two days later he released a statement saying he did not see a "compelling case" for adding additional monetary accommodation, while also raising concerns that a cut would add to financial stability risks.
According to the Washington Post, senior Trump administration officials have started discussing whether to lobby for a temporary payroll tax cut to stem an economic slowdown. However, talks are still in early stages as the White House begins to search for suggestions to deal with the slowing economy.
Market participants are looking for direction when central banks gather at the annual Jackson Hole symposium this week. However the expectations are increasing, but it might be disappointing regarding how much information market participants can obtain from this symposium. The conversations around the coffee machines are probably the ones that need to be heard, but they are not public.
The Euro pairs are weakening after ECB's Madis Muller said that, “…the near-term outlook for the bloc was even more pessimistic than the data, thanks to "political uncertainty linked mainly to potential trade restrictions and Brexit."
1.3310 - 1.3350 ▼EUR/USD:
1.1059 - 1.1120 ▲GBP/USD:
1.2047 - 1.2186 ▲AUD/USD:
0.6760 - 0.6790 ▲NZD/USD:
0.6403 - 0.6430 ▲