The U.S. Dollar is trading in tight ranges, slightly improved against a few pairs after a roller-coaster Monday that saw it lose ground in the afternoon.
Overview
Markets have taken it as a breather that the U.S. has been talking to nations such as Canada and Mexico to delay imposing tariffs.
Although the North American partners have decided to take matters to the negotiating table, Chinese exports heading our way will be taxed with an extra 10.0%. Leadership on the Pacific Rim have made it clear they will retaliate as they have been for the past years following a fallout in relations as well as interdependence. Equity traders and investors seem to be ready for it as the response so far has been restrained.
In terms of data, we get a flood of numbers at 10AM in the form of JOLTS Job Openings, Factory Orders, as well as Durable Goods Orders from December. Tomorrow this is followed by Purchasing Managers Index and Friday we get labor sector figures in the Employment Situation. We will be closing watching for any developments over tariff talks and if markets have another wild session.
What to Watch This Week…
- Factory Orders, Durable Goods Orders 10AM
- US Nonfarm Payrolls, Friday 8:30AM
- Monex USA Online is always open
MXN ⇓
The Mexican Peso is down by almost half a percent while the Canadian Dollar is up, after falling to its weakest since 2003, by almost as much following various rounds of reaction to the temporary relief in postponing tariffs on all products coming from USMCA trading partners. Mexico’s President Claudia Sheinbaum and Canada’s Prime Minister Justin Trudeau achieved some diplomatic success by agreeing to a few items that met the White House’s demands for concessions before considering laying off adding costs to trade. Some of these include tougher border presence including military and taking more serious steps to combat fentanyl. We shall see if anything else comes up that must be navigated and can be considered a final resolution.
EUR ⇑
The Euro took a dive yesterday to start February with concerns over potential tariffs to be levied on the Euro-zone. Nevertheless, the shared currency has managed to mount a bit of a comeback as the tensions faded on our side of the Atlantic and traders felt reprieved. Articles from various countries also point at how leaders in the EU are proposing a united front to counter any tariffs that may be charged to just individual countries to safeguard industries as well as overall unison. PMIs for the common-currency area will be out tomorrow, and Retail Sales come out Thursday.
