The U.S. dollar is gaining this morning even as risk appetite is healthy.
Overview
European stock indexes are in the green, and futures show American shares will follow suit at the open. There is little in the way of fundamental data to move the greenback this morning. Indeed, the docket is strangely empty after a long holiday weekend, with only ISM services indexes due out at 10 a.m. However, there are several Fed speakers slated for later this week that demand our attention. Cleveland Fed President Lorretta Mester will speak on Wednesday, followed by Fed President Jerome Powell speaking at the Cato Institute in DC on Thursday. Next week’s agenda is jam-packed with potential market movers, including Tuesday’s Consumer Price Index print.
What to Watch Today…
- ISM Service Index at 10 a.m.
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GBP ⇑
After falling to its lowest level since March 2020 yesterday, the sterling has recovered about half a percent overnight. The U.K. will have a new prime minister, Liz Truss. Ms. Truss will be the third female Prime Minister of the United Kingdom. The sterling’s relief rally may be a result of the incoming PM’s plan to spend as much as 130 million GBP on freezing energy bills before the winter. The move could spark the economy in the near term. Nevertheless, the U.K. will face tough challenges in the coming months, which will lead to more downward pressure on the sterling.
JPY ⇓
The Japanese yen fell to a fresh 24-year low against the U.S. dollar as yen weakness sees no end in sight. The move highlights the growing interest differential between the Bank of Japan and its other G10 counterparts. The Yen has lost over 30% since this time a year ago and over 5.0% in the last month.
