The U.S. Dollar saw an average loss of half a percent across the board after a weekend with swift reaction against the tariffs imposed on metals and other specialized products with China as well as other allies.
USD
Euro and Pound went on heavy recovery mode after weeks of ongoing weakness based on political instability. Officially, Spain and Italy formed new governments, at least establishing a set of leaders to deal with. Markets picked up some steam, which also dropped the buck after it gained as safe-haven last week.
Without much in the form of data, we will be monitoring developments and statements ahead and from the G-7 Summit in Canada, which gathers the strongest economies. The greenback will have to see a turnaround if it wants to add to its seven straight weeks of appreciation. Commodity-based currencies such as Aussie and Kiwi (AUD & NZD) remain near their six-week lowest levels with turmoil in commodity prices.
EUR
The Euro made a return to upward movement following the establishment of new Prime Ministers in Italy and Spain. The third and fourth largest economies of the EU respectively are now being led by less status-quo ascribed political parties. In Italy, a non-experienced PM will try coordinating the development of very expansive fiscal policies and sweeping immigration reform.
Secondly in Spain, former leader Rajoy was basically kicked out by the alliance between regional separatist parties and socialist members who agreed in exercising the right to vote on separating. The shared currency is under pressure as these new forces try to comply with unpopular EU terms.
GBP
The Pound climbed back after falling dramatically all throughout May. New reports show officials drawing out very negative Brexit scenarios in order to prepare for what may or may not come from a lack of a deal. Many economists are starting to convince policymakers that at the very least the Brexit deadline should be extended by another year or so into 2020, perhaps beyond. We shall see if the currency survives another round of bad news in June or if a summit with the EU helps at all.
