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Currency Market Analysis

May 18, 2020 | Currency Market Analysis

Global Themes

Federal Reserve Chairman Powell appeared on 60 Minutes Sunday night, and warned the downturn ‘may last until late 2021’, but that support from the Fed isn’t over ‘by a long shot.’ He will get more opportunities this week to expand on his views when he testifies before the Senate Banking Committee Tuesday and delivers the opening remarks at the “Fed Listens” event on Thursday. The Chairman may be feeling somewhat more optimistic after Moderna announced positive results from its phase one human trial for a vaccine against novel coronavirus.


The market will also pay attention to the NAHB Housing Market Index for May release Monday at 10:00ET and then Housing Starts and Building Permits for April are released Tuesday at 8:30 ET. FOMC Minutes from the April 29th meeting are published Wed at 2:00ET. And on Thursday we get Weekly Jobless Claims and Philly Fed at 8:30ET, and a whole series of preliminary Purchasing Managers Indexes that will provide an early snapshot of the economy in May.


The Euro trades up slightly from Friday’s close, though remains in its recent 1.5-cent range in mid-day London trade. Ahead this week, traders will focus on the ZEW Survey for May published Tuesday, Consumer Prices for April on Wednesday, and Manufacturing and Service Sector PMI’s on Friday.


Traders took a break from beating up the British Pound having driven it to key technical levels. Traders have a lot of data to sink their teeth into this week starting Tuesday with March’s Employment Report, Consumer Prices on Wednesday, Manufacturing and Service Sector PMI’s Thursday, and Retail Sales for April Friday.


Equity markets and oil prices are higher this morning and the Canadian dollar is following suit vs the US dollar. West Texas Intermediate surges $3.00 to $32.50, its highest level since mid-March as production curtailment eases pressure on storage. This week Wholesale Trade for March and Consumer Prices for April are released Wednesday. The week ends with Retail Sales for March. 

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