The U.S. dollar is under widespread pressure this morning.
Overview
The Bloomberg Dollar Index is down 0.5% to start the day, representing its largest single-day decline in a month. The safe-haven greenback is selling off in the face of a strong risk rally. American shares are set to add to their impressive run from the fourth quarter of 2023. The tech-heavy NASDAQ will open 0.9% higher today after reaching all-time highs yesterday. European stocks are also in rally mode.
At 9:45 a.m. EST, S&P will release their composite, service, and manufacturing purchasing managers’ index. There is a load of data on the docket tomorrow including GDP, durable goods and weekly jobless claims.
U.S. Central Bank news will be sparse as policymakers have entered their usual quiet period ahead of the next rate decision on January 31st.
What to Watch Today…
- European Central Bank Policy Decision, Thursday
- US Q4 GDP, Thursday 8:30 AM
- Monex USA Online is always open.
GBP ⇑
The British pound rallied to its strongest rate since January 12th. The U.K. released their own PMI data this morning and it was stronger than expected. The strong PMI data has caused traders to move bets on when the Bank of England would be able to cut rates, boosting the sterling. In addition, the print showed that private firms faced the highest prices in five months, highlighting the worry of prolonged inflation for the U.K. The higher prices were attributed to attacks by Houthi militants disrupting the flow of funds through the Red Sea.
JPY ⇑
The Japanese yen experienced an outside move on speculation, once again, that the Bank of Japan will finally raise interest rates. You would be excused for not holding your breath as we have seen this movie before. Regardless, traders have increased bets that the central bank will indeed raise rates for the first time since 2007 which has caused the yen to rally over a percent against the U.S. dollar.
