The U.S. Dollar is trading in mixed ranges again this morning as traders digest the impact (or lack thereof) of yesterday’s employment numbers and the continued lack of consensus from the Fed
Overview
The Fed’s Paulson has stated that she is approaching December’s policy meeting with the utmost caution due to concerns surrounding the apparent weakness of the labor market, meanwhile the Fed’s Williams finds the current monetary policy too restrictive and still sees room for an interest rate cut in the near term. Williams comments have driven the probability of a December interest rate cut back up to 62.8%.
The U.S. and Russia have jointly proposed a peace plan for the cessation of the Ukrainian conflict that would see the regions of Crimea, Donetsk, and Luhansk formally annexed by Russia and the gradual lifting of sanctions, among other concessions. Today also marks the deadline for U.S. companies to cease purchases of crude oil from Russian behemoths Rosneft and Lukoil, thereby disrupting Russia’s 7% share of the global crude market.
What to Watch This Week…
- Monex USA Online is always open
GBP ⇓
The British Pound is flat against the Buck to start the day after erasing losses from soft UK retail sales and PMI data released prior to the open of U.S. markets. The UK’s budget is set to be released next Wednesday, November 26th, and the new policies included within, such as a reduction in household energy bills, are expected to help slow down the effect of inflation by as much as 0.4% in 2026. As a result, the Bank of England is expected to cut interest rates further than traders are currently pricing in, which stands at an 89.2% probability of a 25-bps cut.
JPY ⇑
The Japanese Yen is the G10’s best performer this morning, having finally moved away from multi-decade lows and to the best level in nine months. The fiscal stimulus package that has been the subject of much speculation over the last several weeks was officially sanctioned overnight, coming in at USD135.5 billion; roughly USD25 billion more than expected. At the same time, the rhetoric from the Bank of Japan surrounding the potential for intervention in the FX market is quickly heating up but is having little to no impact on current price action.
