Daily Market Update

Dollar Slips; Kiwi Rallies A Percent

November 22, 2022

The U.S dollar is modestly weaker this morning as global equities are a touch higher. 

Overview

The Dollar Index is down 0.4%, halting a three-day gain.  Regardless, most major G10 crosses held familiar ranges ahead of major holidays in the United States and Japan later this week. The economic docket is light today, with only the Richmond Fed Manufacturing Index due out at 10 a.m.  However, there are a number of Fed speakers throughout the day that demands our attention.  Cleveland Fed President Loretta Mester will discuss wages and inflation at 11 a.m.  Kansas City Fed President Esther George will make remarks at 2:15 p.m., followed closely by St. Louis Fed President James Bullard.  Tomorrow’s release of the latest Federal Reserve meeting minutes remains the biggest risk event on this week’s domestic agenda.

 

What to Watch Today…

  • Reminder offices are closed on Thursday, November 24th, for the banking holiday

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NZD ⇑

The New Zealand dollar was the biggest mover overnight, gaining nearly a full percent against the U.S. dollar.  Traders are betting that the Reserve Bank of New Zealand will raise their interest rates by 50 basis points at their meeting tomorrow.  It will represent the sixth consecutive meeting the central bank raises rates by half a percent and bring the cash rate to 4.0%. The Aussie dollar also took advantage of a modest risk-on day and gained half a percent versus its American rivals.  Both the Aussie and Kiwi dollars are still at risk of tightening Covid restrictions in China, so today’s gains could prove to be short-lived.

 

CAD ⇑

The Canadian dollar and other commodity-backed currencies popped higher against the U.S. dollar overnight.  West Texas Intermediate futures climbed 1.8%, dragging the loonie along for the ride. On the fundamental front, Canadian retail sales are expected to show a decline of 0.5% in September, down from a 0.7% gain in August.  Excluding auto sales, the dip is expected to be 0.6%.

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