The U.S. Dollar is grading in tight ranges against some majors while significantly weaker against others, such as Australian and New Zealand Dollars.
Overview
Along with the Antipodeans, Asian currencies have also recovered some ground after being pummeled in recent weeks. Equity markets have enjoyed some reprieve, particularly after a streak of good earnings reports that surpassed a key technical support level. Regardless, there are mixed feelings out there about how long of a slowdown we should expect for the economy, and thus swings will be challenging.There will be some data to chew on today in the form of Industrial Production for September at 9:15 AM. Tomorrow there will be a plethora of Housing sector gauges to digest while key Fed members Neel Kashkari and James Bullard speak tomorrow. For now, the buck is trending towards weakening.
What to Watch Today…
- No major economic events are scheduled for today
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JPY ⇑
The Japanese Yen is keeping away from a key level that many traders believe could trigger another round of FX intervention from the Bank of Japan. Recent struggles globally have only increased the greenback’s value against the surplus-led Yen, especially as inflationary expectations continue to increase while treasury-bond differentials skyrocket based on central bank policy divergence thus far this year.
We shall see if BOJ makes the call, but a sustained rally across global markets may delay the need to act in any aggressive fashion to save the Yen’s value. Thus far, the White House does not want to entertain any meeting that leads to worldwide agreements on new exchanges.
NZD ⇑
The “Kiwi” is up by over 1.3% following a strong reaction to higher-than-expected inflation in the form of Consumer Price Index growth. Third-Quarter (Q3) figures indeed advanced by 2.2% when only 1.5% was foreseen. With growing frustration that prices are not lowering anywhere, speculation is only higher about the will of central banks to hike interest rates even more in order to cool off the economic steam that keeps prices afloat.
While commodities and raw materials, as well as shipping, continue to be expensive, central banks will have to figure out a way to trip the economy to settle down inflation. We cannot see much beyond the remainder of the year, and we see room for a change of heart all around.
