Daily Update - 29th April 2020
• USD Goods Trade Balance (Mar) • USD CB Consumer Confidence (Apr) • USD S&P/CS HPI Composite - 20 n.s.a. (YoY) (Feb) The dollar dropped against a basket of currencies on Tuesday, a day before the Federal Reserve was due to conclude its latest two-day policy meeting and as investors rebalanced portfolios ahead of the end of the month. Month-end rebalancing is negative for the greenback, with the U.S. dollar likely to be sold against the euro, sterling, the Japanese yen and the Australian dollar. The euro fell to U.S. session lows against the greenback after Fitch Ratings downgraded Italy’s debt rating to ‘BBB-minus,” the lowest investment grade. Optimism that countries across the globe are getting closer to reopening their economies has cheered stocks this week and reduced demand for the greenback. Also, data released from U.S, March Goods Trade Balance, which posted a deficit of $64.22B, worse than the $-62.67B expected, and Wholesale Inventories for the same month, which came in at -1.0% beating the market’s expectations. The Richmond Fed Manufacturing Index collapsed in April to -53, while the CB Consumer Confidence Index plunged to 86.9 from 118.8 previously. • USD Fed Interest Rate Decision • USD Federal Open Market Committee (FOMC) Statement • USD Gross Domestic Product (GDP) Price Index QoQ • EUR Germany Consumer Price Index (CPI) MoM The initial estimate of US Gross Domestic Product for the first quarter is projected to show an annualized contraction of around 4%. That would be the worst since the crisis but only the tip of the iceberg in comparison to the downfall expected in the second quarter. The Federal Reserve will probably leave its interest rates unchanged in the first scheduled meeting since January, yet after non-stop announcements of stimulus to combat coronavirus. Investors will be looking for hints about the next steps by the bank, which has recently expanded its municipal bond-buying scheme.Yesterday Explained
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