A win for the dollar

3 minute read


The Chicago Fed's National Activity Index was reassuring, if not exactly inspiring. For June, the reading was -0.02 after -0.03 in May. A figure of zero would represent trend growth and the Fed's summary was that the "Index points to Economic Growth near Historical Trend in June". 

That single US statistic was not sufficient to encourage investors to buy dollars and, to be fair, there was little sign of movement during the New York session. Overnight, however, the USD began to plod higher for no particular reason and it became the day's top performer.


Those with an interest in the EUR had even less new information to go on. The Bundesbank's Monthly Report was less than inspiring. Germany's central bank sees employment rising in the next three months as a result of weakness in manufacturing and exports and it suspects that gross domestic product shrank in the second quarter. This morning's Bank Lending Survey from the European Central Bank was vaguely positive, noting increased loan demand across the board and improved access to funding euro area banks.

There were no euro zone economic statistics this morning. The EUR is 0.3% lower on the day against the USD and on average unchanged against the other majors.


There were only two important economic statistics in the whole wide world on Monday and one of them was Canadian wholesale sales. That was doubly unfortunate for the CAD, because the number was a bad one and there was nothing else to distract investors' attention. Analysts had forecast a 0.5% increase so investors took a dim view of the unexpected and sharp 1.8% monthly decline in May. Following the release of the data the Loonie moved steadily backwards.

Oil prices were of no consolation because WTI crude lost 1% on the day, moving lower during the New York sessions before steadying overnight. The Loonie is 0.7% lower on the day against the USD.


Sterling saw no recovery from the damage done by the National Institute of Economic and Social Research with its economic outlook. Investors were all too ready to believe that "On the assumption of an orderly no-deal Brexit, the economy is forecast to stagnate, before starting to grow again in 2021." The GBP is 0.3% lower against the USD.

The sole UK ecostat this morning will be the Confederation of British Industry's Industrial Trends Survey, which measures the state of manufacturers' order books. As New York opened, the Conservative Party revealed that Boris Johnson was chosen to replace Theresa May as Prime Minister. He will take up his new post on Wednesday.


Bank of Japan governor Haruhiko Kuroda spoke at the IMF in Washington about "Overcoming Deflation: Japan's Experience and Challenges Ahead". He stuck to tradition with his insistence that the BoJ will "persistently continue with powerful monetary easing" to lift inflation toward its 2% target. There was little reaction from the JPY because investors have heard it all before, and headline inflation is still down at 0.7%.

The yen lost ground overnight to the advancing USD. It is 0.3% lower on the day.

Sign up for a free account

Sign up for a free account

Access our convenient and secure online platform to process your international payments. Manage beneficiaries and view payment status and history at the click of a button.

Find out more
FX business solutions

FX business solutions

We provide tailored services to help companies make international payments and manage their foreign exchange risk

Find out more