The U.S. Dollar is trading in weak ranges continuing a weakening trend that began last week as markets look optimistic with recent developments.
Overview
China’s will to fully re-open to all activity following the end of the zero-COVID measures that caused frustration with the supply chain of global trade is aiding risk appetite.Indeed, the world’s second-largest economy is already impacting Emerging Markets, looking to fill China’s growing demands, with the MSCI EM Index entering a bull market. It has improved by 20.0% since October, coinciding with a 7.0% slip for the buck ever since.With stock traders betting that the Fed’s impact on interest rates will not be a crippling factor for profits this year, expect the buck to dwindle further as risk-aversion fades. Data points will be released this week, but none more important than the inflation report to come out Thursday.
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 improved by almost one percent this morning, with traders betting that the Fed will not be hiking interest rates for too long. Following the release of ISM Services showing a contraction, traders increased the odds of a slower pace of hiking after February. Meanwhile, it is the European Central Bank’s promise to normalize monetary policy and get away from easing. We will see how sustainable today’s rally is, but it is felt across markets that better times globally are ahead, thus dollar-negativity to come.
GBP ⇑
Sterling is up right now based on the appetite for risk in the environment benefitting all but the buck. This week could be a good one for Pound if the narrative remains friendly towards prosperity in 2023 while data is released on Friday to assess November indicators as well as 3-month Gross Domestic Product
