The U.S. Dollar is trading in slightly weaker ranges across the board this morning as markets digest the rapid developments in various exchanges.
Overview
Oil prices have reached their highest in 10 months, reaching $95.0/barrel for Brent Crude Oil overnight as a result of ongoing cuts to supplies as agreed by OPEC+ countries. Meanwhile, the U.S. and Europe must figure a way to counter the pro-Russian side of markets and this week will give insight into how secure central bankers feel about the financial system in the midst of turmoil.
While China’s stimulus is perceived as a plus towards recovering a sense of global growth momentum, the negatives come from a deeper alliance with Russia as the nation refuses to consider ending the armed conflict in Ukrainian territory. As we have discussed, everything from fuel to food has crippled Europe’s ability to invest with confidence after the shock that came from losing major energy partners.
The mixed narrative can be overwhelming, and it presents itself in outlooks. The Organization for Economic Cooperation and Development explained in its updated report that they see 2023 closing better than originally thought, however, they reduced figures for what is to come in 2024. Expect high volatility as the week only brings more statements from world leaders when they meet for a U.N. General Assembly in New York.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
EUR ⇑
The Euro is mostly quiet after the release of August inflationary data that came in just below expectations. Consumer Price Index for last month increased by 0.5% vs. 0.6% forecast, thus bringing down the annual average to 5.2% from 5.3%. Data-wise, we will get more information per Consumer Confidence on Thursday, followed by Friday’s Purchasing Managers Index.
There is also a narrative growing about how some good times may come if the pause period expected from interest rate increments after economic reviews have credited central banks, especially the Fed, for doing what they felt was necessary until supply and demand commanded prices in a healthier way than after the worst of the pandemic. If the overall policy has been alleviating and a recovery materializes, the Euro could have stronger prospects for appreciation while it goes to a cooldown.
CAD ⇑
The Canadian Dollar has improved by over half a percent, primarily boosted after CPI figures gave reason to believe the Bank of Canada will remain on the tightening mindset and delay cuts to its interest rate despite some economic worry. August CPI came in at 0.4%, double the expected 0.2%, while the annual average climbed to 4.0%. It is clear the northern neighbor is going through a period of “stagflation,” with its Gross Domestic Product having already experienced a contraction. At the end of this month, we will see if anything has improved with GDP for July and the year out then.
