The U.S. Dollar is slightly down against its peers as the week closes with a deluge of economic indicators and reaction to earnings.
Overview
Equities in the U.S. seem to be ending July with the strongest monthly improvement since November 2020. Meanwhile, Asian and European trading sessions differed in tone with technology in China disappointing the former as better-than-expected growth data boosted risk-appetite on the other side of the Atlantic.
June numbers this morning showed that the economy may not be as bad as some believe. Personal Income and Spending advanced more than expected while the Personal Consumption Expenditures deflator also grew higher than forecast. Ultimately, this means the Fed has been proven right in saying the economy can withstand its rate increments and gives it enough room to keep hiking as telegraphed. For now, it looks lie the buck will benefit for the day, but the buck could see a turnaround based on optimism elsewhere.
What to Watch Today…
- No major economic events are scheduled for today
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EUR
The Euro is losing some ground this morning following the release of solid U.S. economic data. It is important to note however, that the Euro-zone Aggregate indicators from this morning revealed that Europe may not be in as dire a situation as it had been foreseen through Q2. Consumer Price Index expanded only by 0.1% while Gross Domestic Product growth came in 0.7% vs. 0.2% expected. Naturally, these are not stellar figures, but allow the European Central Bank to exercise its new hawkish policy and bode well for Euro-appreciation down the line.
GBP
Sterling has been knocked down from its highest level in a month following a dollar rally emanating from a better economic assessment than estimated. Additionally, anxiety over a new Prime Minister is adding to long-term worries about the U.K.’s continuity and ability to collect revenue. Liz Truss, a front-runner for the PM position, explained that she wants the Bank of England to review its 2.5% call for economic growth this year. In some circles, it is worrisome to have a leader comment on the BOE since it brings up questions about the candidate’s respect for the body’s independence in decision-making.
