The U.S. Dollar is closing out the week trading in different directions across the board as markets digest growth as well as inflationary data in various regions.
Overview
While the U.S. economy has pointed at ongoing advancement in prices as well as stable productivity, other areas of the world have been forced to rethink a more stimulus-driven strategy. On the other side of the pond, the Euro-zone is stagnant while over in the United Kingdom, the economy is floundering.
Global market enthusiasm over stimulus promises from China’s authorities has faded after initially improving the mood for Asian exchanges earlier in the week. The lack of details on how they will fiscally act to boost activity has left investors and traders disappointed and in doubt the impact can be truly felt anytime soon.
The overall lack of optimism in the latter part of this week has boosted the Buck and for now handing it a second week of gains in value. Next week will be key to clearing the air to an extent ahead of 2025 as the Fed speaks as well as other central banks starting Wednesday. Guidance will still be foggy, but at least we will have official statements and decisions.
What to Watch This Week…
- Monex USA Online is always open
EUR ⇑
The single currency, after taking heavy losses against USD to open this year, is attempting to claw back some ground this morning and has gained just shy of a quarter of a percent against USD. The EUR/USD pair is now sitting much closer to prices last seen just before both the Fed and ECB meetings last month, more in line with the macroeconomic data out of the region. French CPI this morning showed inflation increased 4.1% annually, with Germany’s year-over-year inflation slightly lower at 3.8%.
GBP ⇓
Sterling is down by over 1.0% this week after data pointing at a worse-than-expected economic reality. Although October was supposed to be a period for recovery in the U.K. after a September contraction, the monthly Gross Domestic Product figure fell into negative territory for a second consecutive month. Industrial Production is also struggling with a deeper contraction of (-0.6%) instead of expanding as hoped by 0.3%. Spending will be taking off in 2025, but traders are seeing a very worrisome picture economically for the U.K.
