April 24 2019

Apr. 24, 2019 (Western Union Business Solutions)  – The U.S. dollar stayed in the driver’s seat after fresh signs of weakness abroad. The euro and Canadian dollar favored multiweek lows while the U.K. pound hit its weakest in months. The Aussie dollar crashed to six-week lows, dragging the kiwi dollar along for the ride. While stronger, the greenback hasn’t reached a significantly higher orbit, given the limiting forces of the Fed’s steady rate outlook. Still, the dollar stands to gain from optimism about U.S. growth which contrasts signs of a worsening picture abroad. Germany’s influential Ifo survey on business conference unexpectedly worsened while inflation Down Under fell to multiyear lows. Canada’s dollar was on rocky ground ahead of a local interest rate decision today. The Bank of Canada is not expected to change rates but will issue new forecasts for growth. A dovish assessment of the Canadian economy would bode bearishly for the loonie.

EUR

A real bad real-time look at Europe’s biggest economy kept the euro pinned near three-week lows. Germany issued another sobering assessment of the bloc’s biggest economy as a gauge of April business confidence unexpectedly deteriorated, falling to 99.2 from 99.7 in March. The data was consistent with German growth remaining in a very low gear this year as it wrestles with weaker trade and factory growth.

GBP

A cocktail of a stronger dollar and nagging Brexit unease knocked sterling to fresh two-month lows. U.K. lawmakers returned this week from an extended Easter break with pressure growing on the prime minister to win backing of her EU exit deal or turn the reins over to someone else. The uncertainty for both Brexit and Mrs. May’s leadership has eroded pound sentiment.

CAD

The loonie fell to six-week lows as traders braced for a policy decision today at 10 a.m. ET from the Bank of Canada. No change to the bank’s 1.75% lending rate is expected this week or perhaps at all this year. Central bankers will also release new forecasts for growth that could be impactful for USDCAD. Continued caution about the outlook for growth or expectations for the economy to remain in a lower gear this year would tend to keep USDCAD biased toward the top of its range with the pair sitting 2 cents from 2019 peaks.

AUD

The Aussie dollar plunged to six-week lows after weaker than expected local inflation strengthened the case for the nation’s central bank to slash borrowing rates to new lows. The slowing in first quarter inflation to 1.3% from 1.8% in Q4 was the weakest rate since 2016. Tepid inflation lowered a bar that was seemingly already within reach for the Reserve Bank to cut rates from 1.75% in the months ahead. The RBA next meets on May 7.


USA