The U.S. Dollar Index has gained an average of only 0.05% over the last three days in narrow intraday ranges. The void of U.S. economic data releases has traders focused instead on comments from Fed officials, several of whom spoke yesterday and others scheduled to speak today at different venues. The Fed’s Barkin starts things today, followed by Waller, Williams, Bostic, Barr, Waller (again), and Bostic (again) who will moderate a panel with Collins and Mester.
Short term support for the dollar index is at 104.00 and resistance at 105.00, currently trading at 104.645. The dollar’s biggest daily advance is a 0.21% gain vs. CAD. Canadian CPI released today for April was 2.7%, matching estimates but slowing from March’s 2.9%. The lower CPI reading led to an immediate selloff of CAD in favor of the dollar.
Tomorrow’s U.S. data reports include Mortgage Applications, Existing Home Sales and the FOMC Meeting Minutes from the Fed’s May 1st policy decision.
The Japanese yen has fallen out of the headlines now that several weeks have passed since the Bank of Japan intervened on the JPY’s behalf. The USDJPY reached a 160.03 high and 151.85 low during the height of the yen volatility in late April/early May. USD bulls have lifted the pair to as high as 156.75, as traders balance the risk/reward of being long above 157.00 with the possibility of more intervention.
Gold is holding onto yesterday’s gains, supported by lower treasury yields. With the Fed expected to begin cutting rates this year, asset managers will need to produce return without the tailwind of bond yields. Bitcoin is another asset that will likely benefit from a lower O/N Fed rate.
