The U.S. Dollar has been coping with a mixed morning in which the tables turned from the sour market mood that developed yesterday afternoon.
Overview
Although data yesterday showed a more than just resilient economy for the U.S., data releases earlier gauging inflationary pressures, and spending came in lower than expected. Personal Income, as well as Spending for June, came in at a slower pace than predicted, while the Personal Consumer Expenditures Deflator stayed at a low 0.2% pace. This means that, indeed, some economic items are slowing down, and if the Fed is data dependent, numbers are showing less need for hiking interest rates down the line.
Overseas sessions felt alleviated as well after the Bank of Japan reiterated that its bond-related move is not a step toward monetary policy normalization. There was concern yesterday that a major flight to safety would take place, but instead, the Yen has fallen. As recovery takes place, the buck could give up some of its recent gains, but the only thing that is clear is that nothing about the remainder of the year is guaranteed, and volatility remains high overall.
What to Watch Today…
- No major economic events are scheduled for today
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MXN ⇑
The Peso recovered and advanced some today as the good economy the U.S. is experiencing is also accompanied by good data out of Mexico. The global demand for oil and prices growing has also boosted the currency. Expect chances for interest rate cuts to also go down, which will bode well for the “Super Peso” trend.
EUR ⇑
The Euro is climbing as it mounts a comeback from yesterday’s major dip following the dovish take after the European Central Bank’s expected hike. Economic prosperity in the U.S. may have overshadowed a lot of ECB’s President Lagarde’s take on the economy, but today’s national releases revealed the European situation has been resilient enough for the tightening that has taken place. GDP out of France grew, Germany prevented contraction as it came at 0.0%, and Spain showed growth in prices as well as activity. Economic data may prevent the buck from taking away value as recovery for the rest of the year is still a possibility for the other side of the Atlantic.
