Slow Start to the Second Quarter for the US Dollar

A dizzying slow start for the US Dollar today, with a weaker than expected ISM manufacturing report and verbal banter from China over the US Commerce Department’s tariffs on its imported paper goods. The US ISM report detailed a weakened business confidence which has slowed capital investment, as the effects from the struggling auto and housing sectors left the ISM index below a neutral 50 in November, and an even lower level in January. February and March were back above 50, but the actual data on orders and production are less encouraging. Some inventory draw-down is leaving weak production as underlying capital investment demand remains weak. Against the Euro the US Dollar was consolidating in tight ranges producing a small dip to 1.3381 before closing out the American session at 1.3366. The USD/JYP made less than a 30-point move the entire trading session. The high was 117.86 and the day’s low was 117.46. Last but not least, the only real move was the British Pound which capitalized on the quiet Dollar trading during the London session. Heated speculation of an impending rate hike from the Bank of England helped drive GBPUSD over 135 points from overnight lows to a test of 1.9800. Tomorrow in the news from the US, car and truck sales reports will be released, but traditionally the reports do not draw that much attention in the currency markets.

David Hilgeman XPRESSTRADE Analyst