USD at Lowest Level
The economic calendar is relatively quiet in European hours.
The March set of German Factory Orders and April’s Eurozone Retail PMI figures headline the docket. These outcomes may not necessarily generate meaningful follow-through from the Euro however, with activity data likely playing second fiddle to the disinflation issue and its implications for the ECB.
With that in mind, the single currency will probably have to wait until Thursday’s monetary policy announcement to find a potent catalyst on the domestic front.
Later in the day, the spotlight turns to Fed Chair Janet Yellen, who is scheduled to testify before the Joint Economic Committee of Congress on the outlook for the US economy and the direction of monetary policy.
Needless to say, the markets will be most concerned with what her comments imply about the continuity of the Fed’s QE “tapering” cycle and the possible timing of an eventual interest rate hike. The US Dollar sank to its lowest level in six months yesterday, as signs of firm commitment to policy normalization in Yellen’s remarks seem to offer little in the way of a lifeline to the beleaguered currency.
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