The U.S. Dollar is trading in weaker ranges this morning, making it a third day of losses as the globe tries to recuperate its optimism across markets.
Overview
Following the rout currencies have faced against the buck throughout August thus far, markets overnight welcomed a few developments in China suggesting stimulus will be implemented, starting with the lowering of interest rates. A surprise cut was made to the one-year prime lending rate with the hope of providing more incentives for lending and credit, particularly since housing and industry took major damage during the pandemic and its inconsistent re-opening.
Without any economic data to chew on today, much of the flows will be headline-based, but we seem to be in a period of summer when not everybody is paying attention or participating. The very tail-end of the month will bring about the releases of significant data points in the form of Gross Domestic Product and other gauges of growth. We shall see what finance heads have to offer in terms of statements as they gather for the Jackson Hole symposium. Fed Chairman Jerome Powell will speak there Friday.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
EUR ⇑
The Euro picked up a little steam as we enter a week when people head to the beach of economic symposiums. After a five-week streak of dollar strengthening, the shared currency recovered after falling to its weakest point since the start of July. The mood is being helped by inflationary numbers out of Germany in the form of the Producer Price Index showing a decline in July of (-1.1%) while the year-over-year figure fell (-6.0%), both figures indicative of success for the European Central Bank as it has fought price-growth. Expect Euro volatility to remain high as we enter a crucial period of the year in September while the flaws of trade during war plague regular activity.
MXN ⇑
The Mexican Peso is currently improving based on commodities going up in price and the relief from dollar advancement based on fears over global stagnation. Oil is set to climb following lower productivity in oil exports out of OPEC+ nations. It is also important to note that the member nations of the BRICS group, composed of advanced emerging market economies of China, Russia, Brazil, India, and South Africa, will meet at their summit in S.A.R. tomorrow, where expansion and rebalancing of the word order will be discussed. In particular, we are curious about their discussions of digital currency offerings.
