In their April 2019 Currency Outlook report, Tempus, an exchange rate and global payments company, provides a detailed report including the following topics and sections:

In Brief

• The Federal Reserve did not increase interest rates, however, the USD is up half of a percent
• The global economy is slower than the U.S. economy, hence the better performance of the USD
• As the European Central Bank said that they will aid banks in September, the Euro fell 1.2%
• Central banks in the Oceanic region said that they may cut rates and the Dollars in Australia and New Zealand fell .5%
• Brexit was delayed to April 12, the hurting the GBP
• The Japanese Yen rose 1% and the Swiss Franc rose .5%

In Focus
NFIB Research Foundation’s Small Business Optimism Index has fallen by 7% since August 2018

The View – The USD had proven resilient ahead of the second quarter

• The strength of the USD has been based on other economies faltering
• Stock indices are anticipated to rise on risk-appetite, softening the USD as the demand for the safe-haven currency decreases
• An inverted yield curve has many concerned about a recession
• Many point to a record number of corporate stock buy-backs as the force behind a climbing US stock market, not the strength of the overall economy
• Despite a weak appearance in the Euro-zone, there are signs of recovery such as expansion in retail sales in Germany, expansion of the French Manufacturing Purchasing Managers Index (PMI) and overall inflation on the continent
• There is an air of optimism in the Euro-zone based on the idea of European economic resurgence and more accommodative trade environments once issues such as labor unions in France and Italy’s new budget are solved
• Surveys on chances of a U.S. recession indicate 30% for 2020 and 15% for 2019
• A resolution to Brexit seems far from certain as Prime Minister May’s plan faced a third defeat in Parliament even after she proposed her own resignation in order to have the deal passed

IBC Members can download the complete Currency Outlook from the members-only section of the IBC website under the Special Reports section. IBC membership is free for all regular IHA members – to learn more and to join, visit the IBC membership information page.