The U.S Dollar is trading in mostly weaker ranges to start the week as markets look ahead to inflationary data out of the U.S. and central bank action across regions
Overview
December has truly witnessed the Buck hit the brakes on its appreciation after establishing its highest value overall in two years. While economic data in the U.S. remains strong and an envy for the global situation, the U.S. dollar’s strength has dwindled as long-dollar positions have been shed after a major enthusiastic rally of all USD-denominated assets post-election. As things settle, expect the Buck to be driven by other headlines around the world for what is left of December.
China made statements over the weekend suggesting that they will continue being stimulus-driven while maintaining interest rates moderate. This resulted in uplifting Asian markets a bit, benefitting the Antipodean currencies of Australian as well as New Zealand Dollar. Over in Europe, the shared currency is holding its ground despite speculation of major depreciation after the governments of France and Germany fell apart within their respective parliaments. Wednesday and Thursday we look for inflation number in the U.S. with Consumer Price Index out first and Producer Price Index the day after.
What to Watch This Week…
- US CPI NOV, Wednesday 8:30AM
- European Central Bank Rate Decision, Thursday
- UK GDP, Thursday
- Monex USA Online is always open
EUR ⇑
The Euro has managed to remain stable and not dive after some concerning developments in France and Germany causing a reshuffle of the governing coalitions. In general, the Euro-zone is going through major challenges with its politics highlighting a growing polarization. It bodes poorly for a union that requires cooperation that nations are starting to doubt their ability to sustain budgets and still push for growth. The European central Bank will meet announce its policy meeting decision on Thursday where a cut is expected with perhaps promises for a few more into early 2025.
MXN ⇑
The Mexican Peso has been able to recover after a November that saw it dive to the lowest point since 2020. Inflation figures out this morning saw it relax in pace ahead of a Banxico meeting on November 19th when other central banks will make announcements. This week could move the needle based on fundamentals as data points are released throughout the week.
