The U.S. Dollar is trading in favorable ranges as markets prepare for earnings reports and the likelihood of delays from the Fed in cutting interest rates down the line.
Overview
Ahead of the U.S. Presidential election, many investors are pricing in a Trump comeback, one that would likely mean more fiscal spending as well as higher inflation, which would prevent the Fed from lowering borrowing costs further.
Per markets, a Harris victory would bring on spending, but trade would not be disrupted and thus would not cause a rapid increase in prices. We will get a look at JOLTS Job Openings for September and this month’s Consumer Confidence at 10AM, the only data before we bite into Gross Domestic Product and inflation for here and the Euro-zone tomorrow and Thursday.
Over in Japan, Prime Minister Shigeru Ishiba has been busy calming down tensions after the weekend’s legislative elections resulted in the ruling coalition losing control. The Yen could soon be in a position where talks about intervention emanate, but the Bank of Japan has stated its concern over current political disarray. We shall see how much more room the Buck has to gain.
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 is quite close to being at the weakest point against the Buck since early September and if it moves beyond that, it would mark the worst MXN since October 2022. Gross Domestic Product will be out tomorrow with an estimate of 0.7% for Q3 pace. Anything surprising in either direction will certainly affect MXN value.
EUR ⇓
The Euro has once again dropped to its lowest point since July as the Buck remains a safe-haven asset in the midst of uncertainty over the U.S. election. Tomorrow will be key in assessing the situation for the euro-zone as we get GDP numbers for Q3 as well as Confidence readings for suppliers and consumers. On Thursday, we see Consumer Price Index for October, expected to show the annual inflation average to be below 2.0% at 1.9%. Any surprise on that front could help Euro recover, on the other hand, evidence of faster disinflation will bode poorly for the shared currency’s strength.
