The U.S. dollar is mostly unchanged to start the day after spending most of yesterday in rally mode.
Overview
Stocks slipped a touch yesterday as market participants worried that tensions with China would escalate. U.S. stock futures are solidly in the green today, but the greenback has not lost ground. S&P 500 and Nasdaq contracts are up over half a percent.
The dollar may be holding its own today because of rather hawkish comments made by Federal Reserve members yesterday. Most investors have expected the Fed to slow the path of rate hikes after a few aggressive 75 basis point hikes. But officials yesterday seemed to push back on that notion. San Francisco Fed President Daly said the central bank has “a long way to go” on reaching price stability. St. Louis Fed President Bullard said that there would have to be “convincing evidence of inflation easing. The bullpen of Fed speakers is deep today as well. We will hear from James Bullard again and four other Fed speakers throughout the day.
The economic docket is a busy one today. S&P service and composite PMI will hit the wire at 9:45 a.m., followed by factory orders and durable goods orders at 10 a.m.
What to Watch Today…
- Factory Orders and Durable Goods at 10 a.m.
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CAD
Commodity-backed currencies such as the Norwegian Krone and Canadian dollar are rallying in early trading today. The cartel OPEC+ agreed to a modest 100K barrel a day output hike next month. The agreement was less than some expected and has sent oil prices higher. As a result, the loonie has gained as much as 0.4% versus the greenback. The krone is up nearly a full percent.
NZD
The New Zealand dollar bucked the trend of stronger commodity-backed currencies. The kiwi fell nearly a full percent against the U.S. dollar following poor economic data. New Zealand’s jobless rate unexpectedly rose 3.3% in the second quarter, up from 3.2% in the previous quarter.
Bloomberg News points out that the uptick in the jobless rate may slow the Reserve Bank of New Zealand’s rate hike path. The kiwi has recovered somewhat and is now down 0.3% on the day.
