In their May 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 USD had another month of swings, rising .8% in April
• Economic performance divergence is a strength for the USD as other currencies struggle
• Based on Latin safe-haven and oil prices, the Mexican Peso rose 1%
• The Euro finished April with no gain or loss as it swung back from its weakest level in 2 years
• The GBP lost .5% after the new Brexit deadline was announced for October 31
• Safe-haven CHF and JPY slid 2%

In Focus
UK Prime Minister, Theresa May, has a new deadline of October 31 to come up with a Brexit deal.

The View – The USD remains dominant due to low volatility 

• Regardless of global fears, the U.S. economy saw over 3% economic growth, underscoring that volatility is very low in currency exchange, but the USD is doing well because the U.S. economy keeps going
• Canada saw less than 0.0% growth and Italy is dragging down the EU with a “technical recession”
• Less than positive measures such as Industrial Production and manufacturing gauges in the Euro-zone show further evidence a business slowdown
• In an anemic trend since the third quarter of 2018, the Euro-zone may have reached a bottom as GDP returned to .4% in the first quarter, however, the currency remains fragile and susceptible to negative commentary from EU financial leaders who view the EU’s markets under attack
• In the EU, France and Germany are coping with major challenges, Italy’s forced alliance government is showing signs of weakness and several Eastern European countries want to test limits of sovereignty
• Representing the fourth largest combined economy in the EU, P.I.G.S (Portugal, Ireland, Greece and Spain) is growing at a faster pace than the rest of the EU bloc at .6% for the fourth quarter and .7% for the first quarter of 2019
• Elections in the EU Parliament in the final weeks of May will be a key component of the Euro’s changes in the second half of 2019
• Cohesion and cooperation have lead to great results in Greece as the country’s ASE Index thriving, up by 26% this year, as European stocks as a whole are yielding no gain
• As the U.S. economy remains steady, U.S. Fed Chairman believes that things should be left alone and not aid is needed and that the recent inflationary slowdown is temporary and the Feb will meet their targets

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.