Daily Market Update

Buck back Up, Markets running scared

November 07, 2023

The U.S. Dollar has gotten back on green territory across the board after commentary that revived expectations of hawkish action left ahead to combat inflation.


Without much to chew in terms of data out there, markets are paying close attention to statements from decision-makers and the latest came from a Fed member. Minneapolis Fed President Neel Kashkari explained that the fight against rice growth is not over regardless of recent evidence showing disinflation. Other financial voices are warning us to be careful about thinking that the next Fed move would be a cut instead of an increase in interest rates. Naturally, this is currently benefitting the greenback.

Meanwhile, other central bankers and leaders on the other side of the pond have downplayed the economic situation and the need for eventual stimulus. Overnight, oil prices fell, with WTI Crude dropping below $80.0/barrel for the first time in two months. There are some economists and business surveys exuding concern over perceiving lower demand than earlier in the year. There will be more comments to come Thursday from Fed members, including Chairman Jerome Powel, who is participating in the IMF’s annual research conference. For now, the dollar is in recovery mode.


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The Euro is declining, already down almost half a percent from yesterday’s highs after developments and statements slashing faith in the Euro-zone economy. European leaders are concerned about the Israeli conflict and how long it can continue. There are European officials as well as American ones in Turkey trying to alleviate the crisis and prevent it from escalating across the region. Ukraine is already worried that the focus on their battle will deviate to the Mideast.

Over in Germany, Chancellor Olaf Scholz has faced growing opposition so his party is hoping to push for a change to the borrowing ability the government has per its constitution to prevent going into undesirable levels of debt. The idea is to work on funds over €100.0 billion to be invested in infrastructure and other public projects to stimulate the economy. It would mark a dramatic shift from frugal ways but deemed necessary by his administration. German Industrial output numbers came out showing that recessionary pressures are accumulating.



Sterling has dipped much like the shared currency based on the potential for central bank policy divergence in 2024. Bank of England Chief Economist Huw Pill professed that in assessing the current economic dynamics, it may be useful to cut interest rates and it could start as soon as mid-year. Overall, performance-wise the U.S. is still way above other regions and with Emerging Markets growing off of their own strength and merit, Euro as well as Pound are still volatile without signs of growth in the horizon.


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