US dollar fell on Monday as traders anticipated a relatively quiet weekend on the geopolitical front.
The US Dollar trades largely steady on Monday, with markets breathing a sigh of relief that the weekend remained relatively tranquil with no more reprisal from Iran against Israel. Furthermore the de-escalation provides gasoline for risk assets, notably equities, to climb higher on Monday. With the risk-on tone, the Greenback may have some more room to fall.
Moreover monday’s calendar is very thin in terms of economic data. The US Gross Domestic Product (GDP) will be released on Thursday, followed by the US Personal Consumption Expenditure Price Index (PCE) statistics on Friday. The latter is the most crucial for this week because the PCE is the Federal Reserve’s favored inflation gauge, and another strong reading may prompt markets to price in a rate hike before considering any cuts.
Daily Market movers:Tensions in the Middle East have eased significantly, sparking an equities rise.
The Chicago Fed’s National Activity Index will be announced at 12:30 GMT. The previous reading for February stood at 0.05.
At 15:30 GMT, the US Treasury will auction three- and six-month bills.
Commodity futures for oil and gas are declining as tensions in the Middle East calm.
Furthermore Equity markets are sighing. relief. Asian shares are trading up 1% in both Japan and China. European shares are up about 0.5% on the day, tracking US equity futures.
According to the CME Group’s FedWatch Tool, expectations are strengthening for no change in the Fed’s monetary policy in June, with a slim 17% likelihood of a rate drop.
The benchmark 10-year US Treasury Note is trading at roughly 4.64%, having recovered further from its Friday low of 4.50%.
