The U.S. Dollar is in fairly tight ranges this morning.
Overview
Risk sentiment is modestly weaker after U.S. equities posted strong results yesterday. Earning’s season continues today and the rest of the week. So far, just over half of the companies that have reported have beaten estimates. Still, the war in Ukraine, energy worries, and persistent inflation has kept the equity rally in check. We must also keep an eye on developments in China. Chinese markets were in free fall yesterday before staging a very small comeback today. Investors are fleeing as President Xi tightens his control over the country. The Chinese yuan fell to a 14-year low. As the world’s second-largest economy, outcomes from China will spread through global markets.This morning’s economic docket will give us insight into the nation’s Housing market with the S&P CoreLogic data out at 9 a.m. Later, the Conference Boards’ consumer confidence data is expected to show a slight decline in October from September.
What to Watch Today…
- No major economic events are scheduled for today
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EUR ⇑
The Euro is holding steady while looking for room to grow as markets get ready for higher interest rates from the European Central Bank on Thursday. A few Confidence gauges will also be released on Friday that will help indicate if the mood is ripe for more monetary tightening in the face of economic challenges based on energy consumption.
Recent analyses of Germany’s behavior with Russia suggest that a lot has been done in good measure to prevent any unforeseeable disaster when it comes to supplying the economy with enough energy to not contract too much through the winter. If economic prospects improve while coping with difficulties, Euro could experience a rally to finish the year.
GBP ⇑
The British Pound was the biggest gainer among G10 currencies, gaining half a percent against the U.S. Dollar. Early this morning, Rishi Sunak officially became the Prime Minister of the United Kingdom after he met with King Charles III at Buckingham palace. At the age of 42, he becomes the youngest PM in more than 200 years. The son of Indian immigrants, he also becomes the first PM from an ethnic minority background. As the third Premier in seven-week, Prime Minister Sunak faces an uphill battle. He has promised to “fix” the mistakes made by Liz Truss. So far, markets are giving Sunak the benefit of the doubt, which can be seen in the modest increase for the Sterling.
