The dollar is sprinting into the week, propelled by rising U.S. Treasury yields and upbeat data. We’ll see if it can hold onto its gains as more data rolls in, and as the European Central Bank and Bank of Japan make monetary announcements later this week.
Dollar boosted by PMI, home sales data
The dollar was trading up against its peers Monday morning due to the 10-year Treasury nearing 3%, but data out Monday morning is helping it continue its strength against the euro, pound and Japanese yen.
The composite Purchasing Managers’ Index came out lower than expected, but the manufacturing and services PMIs beat expectations.
The EUR/USD pair extended its slide to 1.221 on the news. The Eurozone’s PMI data earlier Monday was mixed, but largely disappointed traders.
Existing home sales for March rose 1.1% month over month, compared to a 0.2% expected and hitting 5.6 million. On Tuesday, we’ll get a reading on new home sales, which are expected to rise 1.9% to 0.63 million.
ECB interest-rate decision Thursday
The European central bank will announce its interest rate decision on Thursday and hold an accompanying press conference.
The ECB is likely to keep rates the same, but it will be interesting if and how the bank addresses the recent slew of weak data out of the Eurozone.
The worse-than-expected inflation numbers last week aren’t expected to alter the ECB’s long-term outlook.
Bank of Japan monetary policy meeting Thursday
The Bank of Japan will release its consumer price index for April Thursday evening (their Friday morning). It’s expected to raise slightly year over year. CPI excluding fresh food is expected to remain steady.
Shortly after the release the Bank of Japan will deliver its interest-rate decision and monetary policy statement. BoJ is expected to leave rates at -0.1%, but we could see a lower GDP forecast for 2017.
This is the first meeting since BoJ Governor Haruhiko Kuroda was reappointed and the appointment of two new Deputy Governors, Masayoshi Amamiya and Masazumi Wakatabe.
U.S., U.K. GDP readings Friday
The United Kingdom will release its preliminary reading for Q1 GDP, which is expected to remain the same at 0.4% quarter over quarter.
The first U.S. Q1 GDP reading comes out Friday as well, expected to slide to 2.0% from 2.3% previously. Consumer spending in the past three months is expected to weigh on the results.
Both readings are preliminary, so there will likely be revisions down the road.