The U.S. Dollar is trading in weaker ranges, dropping to its weakest overall level in a week following poor labor data
Overview
Although the European and Asian trading sessions were mixed, the Buck started losing ground as the day began in America with one gauge on job cuts highlighting a very troubled sector. The Challenger Job Cuts figure for October revealed tens of thousands of workers let go, making the Year-on-Year average jump to an outrageous 175.3% over the (-25.8%) contraction expected.
This development goes along with recent surveys showing that there are less opportunities for employment while private and public sector jobs have been eliminated at a faster pace than economists forecast. It is possible the measure adds to bets that the Fed will be more concerned about the economy and decide to use loose monetary policy. Chances of a Fed cut for December stand at 69.0%.
With the U.S. government shutdown now exceeding the last one, there have been announcements of potential delays in air travel and other federal services. Any news updates that forge a path towards a solution to the discord in Congress that can re-open the government will likely impact the Buck in a positive way, but right now it is difficult to foresee after the disappointing economic indicator. We will not have eyes on any other U.S. statistic unless it comes from a private entity. The University of Michigan Consumer Sentiment will be out tomorrow at 10AM.
What to Watch This Week…
- University of Michigan Consumer Sentiment Friday 10AM
- Monex USA Online is always open
GBP ⇑
The British Pound is rising this morning even after a Bank of England meeting that suggests “dovish” action may be ahead. While members decided not to cut interest rates this time from the 4.0% benchmark, BOE Governor Andrew Bailey sounded concerned enough about the state of the financial system that odds for a cut in December have gone up. Members did not have consensus as four members wanted a reduction while five held the bare majority to maintain a no-change vote. Although the governor steered away from commenting on fiscal policy issues, which have fomented doubts about the future, there seems to be momentum within the committee to stimulate later on to aid the system.
MXN ⇓
The Mexican Peso stayed flat ahead of the central bank meeting, Banxico, later on at 2PM. It is expected that officials reduce interest rates by 25 basis points since recent economic figures are painting a picture of contractionary productivity while investment has also gone into negative territory. If the meeting highlights a very “dovish” tone explaining fears of recessionary pressures developing, Peso could finally face a challenge in 2025 after rising by 11.0% thus far this year.
