Buck climbing after labor worry fades

The U.S. Dollar is trading in favorable ranges against major currencies while flat against Emerging-Market tender coinciding with renewed market confidence that is uplifting equities as well.

Tech firms, particularly those involved in the making of microchips such as Taiwan Semiconductor Manufacturing Co. saw their shares rise as investors seem to believe such firms can still deliver high profits based on the expansion of artificial intelligence. This comes as a result of promises by companies to expand their capital spending.

Meanwhile, prices for metals, which had been on the rise and reached record highs for commodities such as silver, started sliding by 2.0% approximately. Meanwhile, oil prices fell for the first time in six trading sessions. This followed news from the White House where the President explained he is likely holding off on any intervention in Iran.

Data-wise, Initial Jobless Claims for the week of January 10^th came in lower than expected at 198K, below the estimated 215K. Also, Manufacturing caught a break per the Empire Manufacturing survey for the month with responders being much more optimistic than expected. Tomorrow, we will close the week with Industrial Production for December. Per the Bloomberg Dollar Spot Index, the Buck is at its highest overall point since December 9^th.

What to Watch This Week…

Industrial Production, Friday 9:15AM
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GBP ⇓

The Pound has fallen to its weakest level against USD since mid-December following concern over fiscal expenditures regardless of economic indicators showing the U.K. economy is growing, though slowly. November Gross Domestic Product figures advanced more than expected by 0.3% vs. 0.1%, however this follows a prior month when the number was flat thus bringing the annual average to just 0.1%. Manufacturing and Industrial Production gauges impressed, coming higher with Industrial numbers coming in at 1.1% when a contraction of (-0.2%) was estimated.

Looking into the details of the report, the U.K. is experiencing underlying weak momentum, high borrowing as well as energy costs, low investment, and challenging global outlook making things even more difficult for the government to look ahead. While the odds of a cut by the Bank of England at their February 5^th meeting are just 7.0%, but for March 19^th it has gone up from single digits to 32.0%.

JPY ⇓

The Euro is hovering around its strongest level against the Buck since start of December as the Buck suffers overall from negative perspective on the Fed controversy. Without any data points for the Euro-zone out this week, the Buck is likely going to continue its gradual decline in the shared currency unless something changes the current narrative. In a surprise and unprecedented move, European Central Bank and others put out a joint statement of support for Fed Chairman Jerome Powell as the matter over an investigation is handled.

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