The U.S. Dollar is trading in tight range to start this week, trending on the weaker side against most peers after a weekend of elections on the other side of the Atlantic
Overview
Germans voted Sunday and results indicate a victory for Conservatives, which was welcomed by markets as a middle-of-the-ground result that can keep the Euro-zone’s largest economy away from extremism.
This has been accompanied by optimism across equities exchanges that are being uplifted by positive earnings. Globally, the narrative is also being caried by China’s government push to help the private sector, which has caused giants such as Alibaba to see jumps of 14.0% t their share value.
Stocks in other parts of the world have outperformed the U.S. S&P 500 as talks of tariffs and other potential trade barriers have not died down. Economists fear that the U.S. economy could be seriously affected if a trade war materializes if /when tariff costs are actually implemented. In the next few days, there will be some data points worth watching out for such as tomorrow’s Conf. Board Consumer Confidence for February. New Home Sales will be out Wednesday, Gross Domestic Product for Q4 and Durable Goods Orders on Thursday, and Personal Consumption Expenditures will be out Friday.
What to Watch This Week…
- Consumer Confidence tomorrow 10AM
- Personal Consumption Expenditures, Friday 8:30AM
- Monex USA Online is always open
Complete Economic Calendar can be found here.
EUR ⇑
The Euro is up at the moment but has been slowly losing ground it gained following overnight confirmation that German elections represented a win for the Christian Democrat-led bloc. They are hoping to be able to form a governing alliance with the SPD, Socialist Democrats, avoiding having to compromise with the far right. Over in Europe, political campaigns have seen candidates across nations call for a review of their EU membership and aiming for protectionism, which now Germany can avoid. The Euro will remain vulnerable to political headwinds and how it copes with inflationary pressures as the yearly average for Consumer Price Index remains at 2.5%.
MXN ⇓
The Mexican Peso is only a bit down against the Buck to start the week. Biweekly CPI numbers showed that prices are going up just as predicted by Banxico, the central bank which has decided to act “dovishly” to safeguard the financial environment from items such as tariff threats. We shall see if proposed costs to all kinds of products are indeed implemented or if some sort of deal is announced that resumes the steady but gradual improvement across market classes.
