The U.S. Dollar is trading in mostly favorable ranges this morning as announcements of stimulus in China failed to create excitement across global markets.
Overview
European stocks are closing almost without change, and the Asian session finished with losses around the Pacific Rim. Global growth seems to be running into some hurdles, while domestically, the American labor sector continues to thrive. Initial Jobless Claims figures from last week released earlier revealed the lowest level in two months, meaning demand for workers remains relatively strong.
Next week, markets will have a lot more volatility, with central action providing guidance for what remains of the Summer. Post-pandemic dynamics are playing out into a “soft-landing,” but especially for the U.S. Elsewhere, data points will need to also demonstrate resilience, otherwise, the buck could have a strong rally and comeback based on Fed hiking ability and confidence to do so.
What to Watch Today…
- No major economic events are scheduled for today
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GBP ⇓
Sterling fell to its weakest point in over a week following statements from various financial experts and reports from institutes that fear the economic pain for the U.K. economy will continue. Former Bank of England Governor Mervyn King explained that the Bank of England’s current determination to hike interest rates is a disservice to economic activity after the pandemic. Furthermore, the National Institute of Economic and Social Research (NIESR) stated in a study that the BOE should reconsider its impact on current policy, and all signs point to the materialization of a recession. For now, the Pound looks to keep away from climbing too high without merit.
AUD ⇑
Both “Aussie” and “Kiwi” rose over the buck as an exception to the current trend favoring it. Data out of Australia showing a better job situation than predicted helped lift its tender. Meanwhile, New Zealand’s inflationary bounce means that the chances for the Reserve Bank of NZ to cut rates are going down for what remains of 2023. Any positive signs out of China are sure to also boost both Antipodean currencies.
