Like the euro, the dollar weakened against the pound as GBP was buoyed by hopes of a lower chance of a no-deal Brexit, reaching a low of 0.753 – at levels not seen since October 2018.
Remarks from Federal Reserve Chair Jerome Powell in line with market expectations slightly buoyed the dollar against the euro later in the day. He told Congress yesterday that the Fed’s decision to pause on rate hikes was a reaction against ‘muted’ inflation, despite concerns of exceeding the 2% target – and worries over ‘global economic and financial developments’.
US housing starts also came in at slightly below expectations, at 1.078 million. However, consumer confidence came in at 131.4, up from 121.7 in January – another sign of a relatively strong US economy. Powell also reiterated that the US is on a good course: ‘we view the current economic conditions as healthy and the economic outlook as favourable’.
Today is a relatively quiet day, although we’ll see durable goods orders and pending home sales. In the meantime, Donald Trump is in Vietnam to meet North Korean leader Kim Jong Un, Tweeting ‘Just arrived in Vietnam. Thank you to all of the people for the great reception in Hanoi. Tremendous crowds, and so much love!’
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