The U.S. Dollar is trading in weaker ranges all across the board as investors try looking for enthusiasm and yield entering a week with much less on the docket than the previous one.
Overview
Last week’s central bank schedule kept traders and investors busy as they digested the news. Overall, the decision by the Federal Reserve to cut by 25 basis points was accompanied by “hawkish” sentiment as it looks like decisions will be very data-dependent and officials will be sensitive to elevated inflation.
This week will be lighter in terms of influential risk events, but there will be important data points to watch for. Tomorrow, we will have September purchasing Managers Index figures, while on Wednesday we get housing gauges in the form of New Home Sales for August. Thursday will feature a final reading for Q2 Gross Domestic Product along with Durable Goods Orders. Lastly, we will close out Friday with the Fed’s preferred measure of inflation in Personal Consumption Expenditures and the University of Michigan Consumer Sentiment. There will be some talk from Fed members and Powell Tuesday in which they may dive deeper into their thinking.
What to Watch This Week…
- U.S. PMIs on Tuesday 8:30AM
- U.S. GDP on Thursday 8:30AM
- PCE 8:30AM; University of Michigan Consumer Sentiment Friday 10AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇑
The Euro is mounting a little bit of a comeback after losing some ground last week following reaction to the Fed’s confidence while still reducing borrowing costs. With just PMIs scheduled for tomorrow as the biggest piece of information to monitor this week, we will watch out for any headlines involving developments to alleviate political tensions. N.A.T.O. has been consulted by Poland and Estonia as the Russian air attacks over Ukrainian air get more intensified. The shared currency is only half a percent or so away from its highest levels in four years, a point that was hit at start of September.
JPY ⇑
The Japanese Yen is moving quietly as this week’s risk is reduced in comparison to last, but there could be moves as debate takes place about the country’s monetary as well as fiscal policies. Political havoc after the resignation of the Prime Minister has left a vacuum of leadership that could be filled, for the first time in decades, by anyone from any point on the political spectrum. Banks and hedge managers are split on where the Yen is headed and how the Bank of Japan will dictate policy with some in the country arguing there needs to be a more stimulus-driven mentality. Like other regions, we will be getting PMIs and see if any influence on its value. Regardless of disturbance, the Yen has managed to improve by 2.0% over the Buck since end of July.
