The U.S. Dollar is weaker this morning based on good news out of China as the country looks to be on track to recover better than economists expected.
Overview
As global demand has its day, currencies across the board are appreciating, as is the price of commodities, with the strong belief that long-term demand will increase. After a few days in which headlines turned the focus from inflation to the dangers faced with the ongoing Ukraine invasion, today seems like a turn-around as a new month starts and the last part of a crucial Q1 gears up.Inflationary data points globally seem to indicate that whatever temporary disinflationary relief at the end of last year may be fading. While the supply-chain issues of the pandemic seem somewhat gone, access and affordability are becoming entrenched in a volatile economy that, by some indicators, is performing well.The Federal Reserve will meet on March 22nd, when they are expected to increase borrowing costs with another 25-basis-points interest-rate hike. Global doubts and the potential for escalation in the Russian war effort will also dictate if the quarter makes the dollar a loser, a winner, or even. Expect swings like today to come often.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
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EUR ⇑
The Euro climbed to its best level in ten days after German inflation numbers that serve as further evidence of the need for the European Central Bank to keep combatting inflation. Consumer Price Index figures for February in the EU’s largest economy rose by 0.8% vs. 0.5% expected, bringing the average yearly pace to 8.7% from 8.5%. Additionally, the Euro-zone merits some admiration after the EU was able to improve on the Northern Ireland protocol while reengaging with the U.K. in the healthiest of ways since 2016.
MXN ⇑
The Mexican Peso is up to its strongest level over the buck since April 2018 as oil demand continues to look to increase down the line. The positivity behind global growth and GDP in the positive territory have made Mexico a key player in trade during a time of reconsideration of outsourcing too many sectors to China.
As the realignment continues in which China looks to not sever ties with a rogue Russia, expect more focus on LATAM as well as India to make up for deterioration in the status quo.
