The U.S. Dollar is trading in a mixed direction this morning as various stories take hold of the markets before an eventful week, particularly for central bank action and FX guidance.
Overview
In the U.S., the Fed will meet on Wednesday and is expected to hike by 25 basis interest points. More importantly, the press conference will help in gauging the committee’s commitment to tight monetary policy and if there is room to believe for a pivot from contractionary measures down the line.
We will get plenty of data to digest, starting with July S&P Purchasing Managers Index figures and followed by Durable Goods Orders and Gross Domestic Product on Thursday. Income, the Employment Situation, as well as Consumer Sentiment, will close out the week Friday. Global-growth wise, Chinese Industrial profits will come out, perhaps adding to some of the appreciation for all tender across the board. All currencies are gaining over the greenback, with Euro and Sterling being the exceptions.
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 is falling this morning as headlines over the weekend pointed at the problems to be had if Ukraine’s ability to export grain continues to be diminished by the war. Russia’s refusal to continue a deal that was worked out with the United Nations and Turkey to keep Black Sea ports active on the grain trade has created more havoc for the European economy long term. The European Central Bank seems to be committed to fighting inflation via higher interest rates and is expected to do so on Thursday, but there is worry the inflationary nature of lower grain supplies will force recessionary as well as ongoing price pressures. After experiencing 30–45-year record inflation, many of the nations within the euro-zone are facing a plethora of issues that may bode poorly for any economic activity or hopes for growth. Europeans did good in finding energy alternatives, but foodstuffs will be a tougher challenge.
JPY ⇑
The Japanese Yen is improving by over half a percent after the Asian session, as commentary from Bank of Japan officials indicated some hawkishness. While the BOJ is not expected to change its ultra-loose monetary stance when they meet on Friday, officials are said to be considering an upward revision to their inflationary numbers. Consumer Price Index also comes out Friday, which could boost Yen further if higher figures materialize.
