The U.S. Dollar is trading in tight ranges without much in markets to affect FX flows.
Overview
The globe continues to watch for China’s headlines about the stimulus, currently hopeful that Chinese financial authorities are serious about injecting enough to spur faster growth. The issue with economic help in China is that it may improve the mood for investors, but economists fear that China’s decisions could have a less positive and significant impact than it managed to pre-pandemic. For now, it is expected that some easing, perhaps major fiscal help, will be implemented as already lending rates are being adjusted to exude a will to assist.
Meanwhile, there could be some momentum for risk-taking based on developments in the tech world as traders as well as investors look at the growing need for microchips and research into Artificial Intelligence uses. Nvidia is leading the charge, and it looks like other sectors want to follow. This week will end with more statements and guidance following the Jackson Hole Symposium.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
EUR ⇓
The Euro is moving in familiar ranges as of the past few days, improving after news of China’s improved outlook as the stimulus is exercised. Although it is quiet this week for the most part, there will be some data in the form of Purchasing Managers Index tomorrow. While there are various issues preventing the economy from flourishing, it will be important if the statistics deteriorate since Germany is already feeling pressure and the Netherlands has already entered into a recession. We shall see if global health overall improves, but specific European progress has got to get better.
GBP ⇓
The Pound is also limited in its movement as traders wait for some PMI data to paint a picture of producers’ investment and spending as we decipher FX direction. Budgetary plans are in the works, and it seems like the Treasury caught a break on its deficit reduction. Less public borrowing is going to help those in the department to try and maneuver around fiscal limitations to meet the administration’s agenda. Last month, it was still the fifth largest July deficit since 1993. The government must figure out a way to increase its revenue, otherwise, the economic instability will not go away.
