U.S. Dollar staying put until Fed meeting at 2PM. Dutch election today
The U.S. Dollar is range-bound, sticking to levels that have been
stagnant as investors and traders keep eyes on the Fed decision and elections
in the Netherlands.
Today’s economic data met expectations as Consumer Price Index and Retail Sales
expanded by 0.1% each. We expect the Fed to not only hike the Federal Funds
Rate, but also to sound the trumpet of optimism after data has shown the
economy is on good pace for growth in many aspects such as inflation and even
wages. The “buck” may not gain a ton since the hike is priced in, but the
tone at press time could have a surprising impact one way or the other.
Markets rose overnight, helping some
resource-based currencies that had been sliding for days. Oil prices declining
hurt the commercial value of other commodities, but a report of lower than
estimated inventories of shale oil in the U.S. put a stop to the bleeding. The
neighboring CAD and MXN are improving as well as the oceanic NZD and AUD.
The Pound erased some of its early week
losses because it seems not a majority of Scots are feeling the whole
separation from the UK as much as their fearless leader. Although Nicola
Sturgeon diligently started the legal process to establish a referendum asking
Scotland if it wants to be independent, a few polls showed that 57.0% of those
surveyed would like to stay British.
It seems like Euro-skepticism is not just
a far-right phenomenon, but a growing sentiment amongst many across the
continent that the Union may no longer be the best system for economic or
social cooperation between nations. GBP is still on an almost 4.0% slide
since the start of February. The instability will keep downward pressure on
The Euro, a currency chained by the shackles of political
uncertainty, will likely trade around current ranges until we get a clearer
picture of results in the Netherlands. Twenty eight parties are on the race for power so a coalition is
expected to form in order to have a government. Geert Welders, the rightist politician
who could shake things up in regards to trade and immigration, has lost some
steam recently and his Freedom Party members may not be able to gain much
support from other parties unless their numbers are impressive. A lot is up in
the air, but all we can do now is to wait for the chips to fall.