Daily Market Update

U.S. Dollar in Rally Mode Early Despite Rise in Equities 

June 28, 2022

The U.S. dollar was up a touch overnight but is rallying in early trading. 

Overview

There is little in the way of headlines driving the greenback so far. Some analysts point to “end-of-month rebalancing flows helping the dollar.”Global equities are in the green this morning following easing covid measures in China.  China announced that it would reduce its travel quarantine to 10 days, which investors hope is the first step in reopening the world’s second-largest economy.It is a busy day for domestic economic data including advanced goods trade balance, wholesale inventories, April FHFA house price index, S&P CoreLogic Home prices, Richmond Fed manufacturing, and June Consumer Confidence.  Despite the volume of data, it is unlikely to have a material effect on the greenback.

 

What to Watch Today…

  • No major economic events scheduled for today

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EUR

The Euro is falling against the U.S. dollar in early trading.  EUR/USD is down 0.5% over the last sixty minutes.  Earlier European Central Bank Chief Christine Lagarde hardened her message on fighting inflation, but it appears not enough boost the common currency.  Lagarde promised the central bank would act in “a determined and sustained manner’ to beat record inflation.

 

CAD

Commodity-based currencies such as the Canadian dollar rose versus the greenback overnight.  Commodities from oil to iron ore to copper reversed losses, lifted by hope that China will eventually return to normal and boost demand.The South African rand is the notable exception, falling over a percent against the U.S. dollar.  South African is being hit by the worst power outages since 2019.  Eskom Holdings, which is responsible for the majority of energy for the nation, cut output to prevent a complete shutdown of the grid.

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