The U.S. Dollar is trading in slightly weaker ranges all across the board as inflationary figures from September showed less pressure than expected and make a case for the Fed to continue cutting interest rates
Overview
While the move has not been too strong, all currencies rose against the Buck as soon as the delayed Consumer Price Index data from September was released. On a very basic level, this means that the Fed can look at inflation with less concern and focus on what actually matters most to economists: growth. Nevertheless, Gross Domestic Product for the U.S. remains high and without official economic indicators on labor it will be tough to argue for ongoing easing into 2026. Once we have evidence of deterioration in the economy then the Fed is likely to keep a stimulus-driven mentality.
Markets are also hoping that resolution to disagreements over trade can be achieved as the U.S. President is set to meet his Chinese counterpart, per a White House statement. We will see how news about ending negotiations with Canada over additional tariffs can influence the Buck. At the time of publishing, October S&P PMIs were solid, positive and better than estimated all across, thus negating the dollar decline from earlier.
What to Watch This Week…
- Monex USA Online is always open
EUR ⇑
In a week characterized by tight FX flows, the shared currency has lost a little bit of ground, but it is trying to save the week with a Friday comeback. October HCOB Eurozone Purchasing Managers Index figures came in better than expected showing expansionary readings for both Manufacturing as well as Services. It was the first time Manufacturing was above the 50.0 expansionary reading since August, when it hit its highest in the past two and a half years. Next week, we will get Confidence gauges as well as the first release of Q3 GDP.
CAD ⇓
The Canadian Dollar has been jumping wildly all week while losing ground at the moment being one of the few exceptions to the rally against the U.S. Dollar. The U.S. government announced that talks over trade will be cancelled, bringing further uncertainty to relations between the two USMCA partners and neighbors. Without details, we just see this negatively impacting the “Loonie” along with struggles already in an anemic economy.
