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Weakening economic activity to drive US dollar losses?

business-articlesWeakening economic activity to drive US dollar losses?
  • Disappointing US data to increase US dollar bearishness
  • Rising odds of no-deal Brexit weigh on pound
  • Australian dollar looks for boost on consumer confidence index
 
US dollar vulnerable ahead of Fed activity indexes
 
Confidence in the outlook of the US economy could take a fresh blow this afternoon if the latest Chicago Fed national activity index and Dallas Fed manufacturing activity indexes weaken.
 
Forecasts point towards another month of softening activity for both measures, highlighting continued weakness within the world’s largest economy.
 
With the Federal Reserve already showing less desire to raise interest rates again in the near future, any disappointing data is likely to weigh on USD exchange rates.
 
Unless the US economy demonstrates greater signs of resilience the mood towards the US dollar looks set to sour today.
 
 
No-deal Brexit worries keep pound under pressure
 
As the odds of a no-deal Brexit increased last week and political divisions widened, the pound was left on a softer footing.
 
However, the British currency has firmed this morning.
 
PM Theresa May has delayed a parliamentary vote on her Brexit deal for two weeks so she can return to Brussels tomorrow for more talks.
 
It’s possible that this delay could inspire further government defections, so political news will remain the driving force behind GBP exchange rate movement this week.
 
 
Consumer confidence to move Australian dollar
 
Reports that ‘significant progress’ had been made in US/China trade talks bolstered demand for higher-risk currencies over the weekend.
 
The mood towards the Australian dollar could improve further this evening if the latest ANZ weekly consumer confidence index prints positively.
 
Signs of improved sentiment among Australian consumers could give AUD exchange rates a fresh boost in spite of the weaker nature of recent economic data.
 
On the other hand, a deterioration in confidence could leave the Australian dollar vulnerable, especially if market risk appetite falters.
 
 
Upcoming Data:
 
Monday, 25th February 2019

13:30 USD Chicago Fed National Activity Index
15:30 USD Dallas Fed Manufacturing Activity Index
22:30 AUD ANZ Roy Morgan Weekly Consumer Confidence Index
 
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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