Daily Market Update

Buck continues good run as data elsewhere disappoints

September 07, 2023

The U.S. Dollar is trading in stronger ranges as markets continue to tumble based on growing pessimism about the stagnant nature of the global economy.


While things in America remain steady and labor numbers point at continued monetary policy, other regions are feeling more problematic. China’s documented slow crawl throughout the year has only added to worries across the world over ongoing inflationary pressures that emanate from a reduction in oil production and established uncertainty over what is to come for the remainder of the year.

Risk-aversion has been the theme for the week as data from Europe and Asia demonstrate a serious gap with how affairs are going in the U.S. Nevertheless, there are worries about the impact of wild climate coming in the Fall and the Winter after fires and other natural disasters affected the Summer. There is talk about the potential for strikes in the auto industry as workers and unions look to get a bigger piece of record profits for major automakers. In a world with attractive bond yields based on high interest rates and stubborn inflationary expectations with an added spice of global chaos bodes well for the Buck. We are still at its best levels since March.

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The Euro fell further following more data this morning showing evidence of the struggles in the Euro-zone economy. Gross Domestic Product for Q2 came in lower than expected at 0.1% versus the 0.3% estimate. The yearly average went from 0.6% to 0.5% as a result. It is perhaps good news that there was not a contraction, but clearly, the region is doing poorly, and the nature of improving many nations in tandem is prolonging the worry over Europe’s woes. In a week, we will get clear talk from the ECB as they meet to make their monetary policy announcement on September 14th.   


The Pound is down to its weakest point since the start of June after commentary from Bank of England’s Governor Andrew Bailey. In his remarks, the BOE head explained that officials are nearing the end of the tightening cycle. Much of what has kept Sterling afloat has been due to the BOE’s will to tighten even while faced with severe economic challenges that have put the U.K. on the brink of recession. BOE will meet on September 21st.

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