The US dollar fell against most major currencies yesterday

USD

The dollar fell against most major currencies yesterday as a decline in US bond yields leads investors to continue worrying about the risk of a recession. The dollar index, which measures the strength of USD against six of its major peers, fell by 0.08% giving back some of its recent rally of 0.53% largely been spurred by euro weakness.

Yesterday also showed US shares falling after a steep drop in consumer confidence. The reading came out at 98.7 well below the 100 forecast and emphasizes a real threat to future economic growth.

GBP

The euro took some gains against the dollar after European Central Bank President Christine Lagarde shared no update on the ECB’s future monetary policy when she spoke on Tuesday morning. The ECB is widely expected to raise interest rates in July to cool inflation in the Eurozone, following in the footsteps of its counterparts in the US and in the UK.

Both Lagarde and Fed Chair Powell will speak on a panel at a forum later today and their comments will be closely scrutinised by the market for further clues on the direction of future monetary policies. Announcements from the three central banks will be the events to watch out for this week. Any comments could create some volatility in the market, and typically when volatility rises we can see a decrease in risk. These central bank speeches could highlight up and coming rate hikes and other economic outlooks.

Key announcements

08:00 – EUR – German prelim CPI m/m – Forecast 0.4%
11:15 – USD – FOMC member Mester speaks
13:30 – USD – US Final GDP q/q – Forecast -1.5%
14:00 – EUR – ECB President Lagarde speaks
14:00 – USD – US Fed chair Powell speaks
14:00 – GBP – BoE Governor Bailey speaks
All day Opec meetings