The U.S. Dollar is trading in stronger levels across the board, aided by economic data that pointed at stronger-than-expected labor and relatively solid growth
Overview
October’s ADP Employment Change showed an added 233K payrolls, more than doubling the forecast for 111K. It is the fastest pace of hiring by companies using ADP in over a year.
Meanwhile, Gross Domestic Product from Q3 came in at 2.8% vs. 2.9% and Personal Consumption expanded 3.7% over 3.3% estimated. Core Personal Consumption Expenditures also outdid the expectation coming in at 2.2% vs. 2.1% signaling that inflation is still lurking. Altogether, this combo makes for an appreciating Greenback that is overall at its best point since July per the Bloomberg Dollar Spot Index.
Ahead of the upcoming election on Tuesday, markets are seeing some milestones, with Gold rising to its highest price on record. The precious metal is considered a safe bet in the middle of a chaotic time across the globe filled with uncertainty over what is to come in 2025. Bitcoin is also rallying hoping to top a March high. We have an eventful end of the week wrapped in plenty of indicators such as gauging productivity in China while inflation numbers from the Euro-zone are released all on Thursday. On Friday, we get the Employment Situation and see how it correlates with today’s readings.
What to Watch This Week…
- Euro-zone CPI on Thursday
- US GDP on Thursday
- US Nonfarm Payrolls, Friday 8:30AM
- Monex USA Online is always open
MXN ⇓
The Mexican Peso has been dropping in value this week, now having reached its weakest value against the dollar since end of September of 2022. Indeed, the neighboring tender is suffering from bets against its stability if indeed a new administration in the U.S. decides to impose tariffs and other costs to trade.
The concern over Mexico’s immediate future is such that even evidence of improvement to growth are being overshadowed. Third-quarter GDP is now at an annual average of 1.5% from 1.3% with Q3 coming in 1.0% higher, beating the 0.6% estimate. Volatility remains high and it will not subside until there is clarity in the election results.
EUR ⇓
The Euro remains stuck at levels that mark its weakest point since the summer. Nevertheless, it must be noted that prior to the American indicators exuding resilience, the shared currency had climbed a bit overnight based on a better economic picture from GDP numbers. The Euro-zone grew by more than expected in Q3 by 0.4% instead of 0.2% economists predicted.
Germany in particular surprised with a reading of 0.2%, coming in positive when (-0.1%) contraction was forecast. The European Central Bank seems determined to continue lowering interest rates gradually, but we shall see if any joyous commentary from key financial decisionmakers gives the shared currency a boost as goals are starting to materialize. Inflation will be released tomorrow.
