The U.S. Dollar is trading in steady ranges after a week that gave some reason to believe the Fed may be done with its hawkish stance.
Overview
Indeed, as 2023 is closing, speculation over interest-rate cuts into 2024 is growing since data shows the economy is in a state of disinflation as well as a job sector cooldown. Inflationary gauges in the U.S. showed that prices are certainly slower in their pace of advancement, with the Personal Consumption Expenditures being at the lowest year-over-year average since March 2021.
Meanwhile, while originally not thought of as significant, further breakdown of Continuing Jobless Claims revealed that since September out-of-work Americans have struggled to secure new opportunities for employment. The number climbed to 1.93MM, which is the latest week on record.
We have October Construction Spending at 10 AM coming after November Manufacturing Purchasing Managers Index comes out at 9:45 AM. At around 10:45 AM we will hear from Fed Chairman Jerome Powell as he speaks during a fireside chat at Spellman College.
What to Watch Today…
- Monex USA Online is always open.
EUR ⇓
The Euro failed to keep its gains from the week prior after facing the reality of poor economic indicators and growing doubts over a pivot to interest-rate cuts in the U.S. While economic numbers have shown disinflation as well as some dent in fast-paced growth, the lack of consensus is making markets wonder if they may have jumped ahead in thinking the Fed will pivot sooner rather than later. It is perhaps in Europe and the U.K. where a more accommodative environment needs to materialize. A split camp makes economic progress the focus and on that front, the U.S. is outdoing many regions but is in particular contrast with the Euro-zone. Rapid moves could come against the shared currency.
GBP ⇑
The Canadian Dollar is closing out the week close to 1.0% stronger following a week of economic data making traders scratch their heads a bit. The September Payroll Employment Change was positive at 22K jobs added after a loss of 44K the month prior. In terms of growth, Gross Domestic Product for the third quarter came in at a contraction of (-1.1%), however, the second quarter’s revised numbers went from (-0.2%) originally to a dramatic 1.4% expansion. There is the belief that things have remained mainly flat for months. In general, Canada seems to be slowly grinding post-pandemic opening and we shall see if there is more excitement to come in 2024.
