The U.S. Dollar is trading in mostly tight ranges, with British Pound and Japanese Yen being the exception as movers in different directions by about half a percent.
Overview
While inflationary concerns continue to dominate market guidance, headlines regarding Brexit-related developments and re-opening in Asia, particularly Hong Kong, are reviving some of the global optimism that characterized the earliest days of the year. Data-wise, there are gauges for release today, but the most important is Consumer confidence at 10 AM. The Richmond Fed Business Conditions and the Dallas Fed Services surveys will be out later as well. Thus far, February is looking like a major winner for the buck, with its overall value up by 3.2% per the Bloomberg Dollar Spot Index.
What to Watch Today…
- No major economic events are scheduled for today
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CAD ⇓
The Canadian Dollar has lost 2.0% of its value this month and could be set for further depreciation following underwhelming economic data. The Monthly Gross Domestic Product for December revealed a contraction when no growth was expected.
Overall, it seems like Q4 resulted in no advancement versus an expectation of 1.6%. Traders are now placing bets that January numbers will be better by 0.3%, thus adding downward pressure on the “loonie” if, indeed, no progress materializes. The year-on-year average went from 2.8% to 2.3%.
GBP ⇑
Sterling jumped this morning following further positive reactions throughout the European sessions regarding the new and improved Northern Ireland protocol. While globally, it was celebrated as a step towards reconciliation of the EU relationship after an exhausting Brexit process, domestically, things also worked out for Prime Minister Rishi Sunak.
It has been feared that he would not get enough of the hard-Brexit conservatives within his party, but commentary from Jacob Rees-Mogg applauding the PM’s success in getting desirable EU concessions added to a fruitful endeavor for the PM and established political stability after a tough test of leadership.
