Trump is set to give his first major policy speech to Congress tomorrow, with the expectation being details of the budget and infrastructure spending. However, like everything with this office, we don’t know what to expect and often when we get it, we don’t know what it means. If the policy released is too vague, we may see this weaken US dollar. Conversely a high spending budget that will promote inflation as he has been suggesting during his campaign could see the USD strengthen.
As for actual data releases Core Durable Goods came out this morning at -0.2% well below the 0.5% increase expected. This should have little effect on markets as eyes still look to tomorrow’s speech. For the rest of the week we have a good number of releases including GDP on Tuesday, Consumer Confidence Wednesday and Unemployment on Thursday. We expect USD to break from the ranges it’s been bound to this week.
It was a quiet week for the Canadian dollar, as it traded in tight ranges across most majors a trend that looks to continue today with no major data releases. This week’s biggest news will come Wednesday morning with the Bank of Canada meeting regarding a rate change. Expectations are that interest rates won’t move but we’ll be looking to see if there’s any change in sentiment with the statement that’s due to be released. After that on Thursday is the monthly GDP release, expected at .3%.
The pound dipped this morning over continued tension with Brexit and the increasing likelihood of a possible Scottish referendum for independence. Reports have said Theresa May is expected to end free movement for new EU migrants next month, this will help the slow clarification of what Brexit will actually mean and how it will affect those in Britain. For the rest of the week we are light on GBP news, with this Wednesday’s Manufacturing PMI numbers, Thursday’s Construction PMI and Friday’s Services PMI being the number’s to watch.