USD Daily Updates

13 July 2018

The US dollar is steady against most major currencies today. Specifically, the buck is slightly higher against all major currencies except the Australian dollar. Yesterday, the US dollar index (a measure of the currency against its largest peers) ended the day slightly higher. After making its most recent bottom just below 93.50, the US dollar index is currently strengthening towards the high end of our indicated trading range. Today's trading range for the US dollar index is 94.60 - 95.50. 

Following the announcement of the June consumer price index yesterday, reactions in the US dollar were fairly limited. Thanks to strong producer price index (wholesale inflation) data one day earlier, many expected retail inflation to accelerate on a year-over-year basis. Thus much of the move was probably priced in.

Turning to Federal Reserve speakers, the Fed's Harker stated that he was open to four rate hikes this year if inflation continues to accelerate. While inflation is moving in the right direction, Harker pointed out that the Fed's preferred gauge of inflation (personal consumption expenditures) remains below its target. He also stated that the latest economic data is quite good. As we have written before, the US Federal Reserve tends to be more proactive when US growth and inflation is accelerating simultaneously. As a result, rate hike odds have been increasing, with many traders pricing in another rate hike in September. Our outlook on the US dollar remains bullish. 

USD/JPY is up slightly and currently trading above 112.60. EUR/USD is flat and trading above 1.1660. GBP/USD is down slightly, and currently above 1.3170. 

Date Event Actual Previous
July 9 Fed Kashkari Speech
July 9 Consumer Credit Change MAY $24.56B $10.27B
July 10 JOLTs Job Openings MAY 6.638M 6.698M
July 11 PPI YoY JUN 3.4% 3.1%
July 11 Core PPI YoY JUN 2.8% 2.4%
July 11 Fed Williams Speech
July 12 Fed Kashkari Speech
July 12 Initial Jobless Claims 7/JUL 214K 232K
July 12 Inflation Rate YoY JUN 2.9% 2.8%
July 12 Core Inflation Rate YoY JUN 2.3% 2.2%
July 12 Fed Harker Speech
July 13 Fed Kashkari Speech
July 13 Michigan Consumer Sentiment Prel JUL 98.2
July 13 Monetary Policy Report
July 13 Fed Bostic Speech