After falling in the previous two sessions, the U.S. dollar is gaining this morning.
Overview
The Bloomberg Dollar Spot Index is up 0.3% at the time of writing, with the majority of the gains seen against the Euro. Traders’ attention has been squarely on the European Central Bank decision discussed below. However, there are major data sets for release this morning that will look to compete for attention.Data showed that the U.S. economy grew at a strong pace in the third quarter. Gross domestic product rose at a 2.6% annualized rate between July to September after falling the previous two quarters. Today’s print was the first estimate, and we will have updated readings in the future. Regardless, the data is a welcome sign. Personal consumption, the biggest part of the economy, climbed 1.4%, which is better than forecast. A separate report showed that U.S. September Durable Goods Orders rose 0.4%, slightly missing estimates of a 0.6% increase. Later, the Kansas City Fed’s Manufacturing Index is due out at 11 a.m.
What to Watch Today…
- No major economic events are scheduled for today
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EUR ⇓
After gaining earlier this week, the Euro is under pressure this morning. As expected, the European Central Bank hiked interest rates by 75 basis points. Futures before the meeting showed a 91% chance of this outcome. Markets are focusing on the modest tweak the central bank gave on future guidance.
The ECB dropped the phrase “next several meetings” when referring to future interest rate hikes. The slightly dovish switch is the main driver behind the Euro’s modest sell-off.
AUD ⇓
The Aussie dollar fell a full percent against its American rival following poor trade price data. Australia’s quarterly export values fell 3.6% in September driven by weaker demand from China. It was the first decline since September 2020 according to the Australian Bureau of Statistics. Analysts point to the 16.9 declines in the price of iron ore prices and other commodities. China is Australia’s largest trading partner.
