SPXS - Week Ahead: Near-Term Dollar Outlook Less Clear Than A Week Ago
2024-05-25 09:30:00 ET
Summary
- Stronger than expected data and hawkish FOMC minutes lifted US rates and the dollar, while the market reduced expectations of ECB easing.
- Sterling remained resilient despite weak economic data, but rate expectations were impacted by stronger than expected CPI.
- The G7 finance ministers took a tougher stance against China's trade practices, and the dollar's setback may not signal a lower trend.
Stronger than expected data and hawkish FOMC minutes helped lift US rates and the greenback last week. That the market continues to also reduce the extent of ECB easing this year is notable but did not prevent the euro from snapping a five-week advance. The 10-year Japanese government bond yield rose above 1% last week for the first time since 2012, but the US dollar traded above JPY157 for the first time since the BOJ is believed to have intervened earlier this month. Sterling's resilience in the face the pullback in May's flash composite PMI (52.8 vs. 54.1) and dreadful April retail sales (-2.3%) is notable. Those reports were unable to offset the impact on rate expectations spurred by the firmer than expected CPI....
Week Ahead: Near-Term Dollar Outlook Less Clear Than A Week Ago