The U.S. Dollar is trading in favorable ranges, erasing the losses experienced in the past couple of days as markets deal with uncertainty and bad news on the earnings front for big firms
Overview
Although equity markets had a great session yesterday, futures are down this morning following bad news from major companies such as Ford Motor Co. and Qualcomm Inc. Additionally, the chances of the Fed using any loose policy anytime soon are truly low after labor figures that showed the sector is the healthiest since 2023. Tomorrow’s official Non-Farm Payrolls shall confirm that.
We will get commentary later at events today from a few Fed members who are typically “hawkish” in Christopher Waller and Dallas Fed President Lorie Logan. Throughout the day, we will likely hear more about tariffs as well as get reaction from some central bank action taking place elsewhere. All eyes will be on the Employment Situation at 8:30AM tomorrow.
What to Watch This Week…
- Banxico 2PM Today
- US Nonfarm Payrolls, Friday 8:30AM
- Monex USA Online is always open
MXN ⇑
The Mexican Peso is flat at the moment, being an exception to the rout by the Dollar against all other pairs across the board. Banxico, the central bank, will announce their monetary policy decision at 2PM, which they are predicted to cut by 25 basis points. It is possible that they make a case for accelerating these cuts since inflation is tamed and they want to maintain an accommodative financial environment as Mexico copes with potential barriers to trade and other macroeconomic challenges
GBP ⇓
The Pound is down by almost 1.0% following the much-expected interest rate cut by the Bank of England earlier, the first reduction of 25 basis points since November. The bets on future slashes increased despite commentary from BOE Governor Adnrew Bailey that members want to be cautious about not cutting too much and thus sparking a new round of inflationary growth. Nevertheless, the BOE also seemed pessimistic about prospects for Gross Domestic Product growth as it cut the forecast by half for the year. They admit the economy is stagnant, but there could be improvement as an ambitious budget is put together. For now, the big moves for Sterling that we foresaw are happening.
