The US dollar is weakening against a basket of currencies to start the trading week. The dollarâs main rivals are benefiting from bearish economic data, as well as renewed risk appetite on reports of âsubstantial progressâ in US-China trade negotiations. In the background is a survey of economist that finds many expect a recession soon.
According to the US Census Bureau, domestic wholesale inventories rose 1.1% in December. The ratio of inventories to sales climbed to a 30-month high of 1.33, from 1.30 in November and 1.25 at the same time in the previous year. This statistic reflects the number of months it would take to sell all the inventory on hand.
On Monday, the Federal Reserve Bank of Chicago reports that its Chicago Fed National Activity Index (CFNAI) tumbled to -0.43 last month, down from 0.05% in December. The index was supported by personal consumption, housing, and employment, but it was affected by lower manufacturing.
Next on the data front this week, traders will look out for the February consumer confidence report, gross domestic product (GDP) for the fourth quarter, and December core inflation.
While it is not driving markets, a new survey is turning heads on The Street. According to a National Association of Business Economics (NABE) study, half of the nationâs business economists say they believe the US economy will slip into a recession by the end of next year. Seventy-five percent say an economic contraction could happen by the end of 2021.
On Sunday, President Donald Trump tweeted that he is willing to extend the March 1 trade truce deadline because there has been âsubstantial progressâ in trade talks with the worldâs second-largest economy. The reports suggest that both sides are attempting to iron out grievances over intellectual property, trade balances, and agriculture.
Markets will also pay attention to Fed President Jerome Powell‘s testimony on Capitol Hill on Tuesday and Wednesday.
The USD/CAD currency pair rose 0.53% to 1.3191, from an opening of 1.3121, at 16:08 GMT on Monday. The EUR/USD edged up 0.04% to 1.1339, from an opening of 1.1335.
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US Dollar Rivals Benefit From Bearish Data
