Ready for the long weekend? Wait, there’s just one more thing. Markets typically quieten the Friday before the long weekend, but not this year. Federal Reserve Chair Janet Yellen is set to speak this afternoon, and with all the recent hullabaloo around a potential upcoming interest rate hike and its impetus in pushing up the dollar, her statements could be crucial for market pricing.
The dollar’s had its best month in over a year, gaining 3.1% this month against 10 major peers, but a dovish stance by Yellen could spur a pause for the greenback. The Bloomberg Dollar Spot Index climbed about 0.2% early in the morning after losing that same amount over each of the last two trading sessions. European stocks, the MSCI Asia Pacific Index and S&P 500 futures are all trading flat; the global markets too are waiting on Yellen’s comments. She will be speaking in Massachusetts at 1:15 p.m. ET, just 45 minutes before the New York market goes dark for the long weekend.
Oil is finding it difficult to maintain its grip on the $50 threshold. After reaching that level for the first time this year yesterday, crude fell again this morning, indicating that a sustainable rise beyond 50 could be some time away. Commodity currencies have pared their weekly advance as a result; the Canadian dollar has weakened at least 0.3%.
The pound remains a barometer of sentiment around referendum, shifting quickly with any change in public opinion. Volatility is now implied as Brexit campaigns heat up. Going into the weekend, the pound has strengthened about 1% over the course of the week, the most out of 16 major currency peers. The euro, on the other hand, is facing a sharp decline against the dollar this morning as the markets factor in the results of this morning’s key risk event, US Q1 GDP, which showed that the US economy expanded at a slightly faster pace than estimated in the first quarter. Despite the upward revision, some are pointing out that it’s still a sluggish start to the year.
EURUSD: USD stronger against the euro, heading for a fourth straight weekly gain.
GBPUSD: Pound ends off a strong week on a slightly weaker note.
AUDUSD: Aussie dollar down on commodity weakness.
USDCAD: Canadian dollar falls sharply after oil fails to maintain hold on $50.