The U.S. Dollar is trading in mostly positive ranges as the first month of the year comes to a close.
Overview
January may actually end as monthly loss for the Buck overall, according to the Bloomberg Dollar Spot Index. This comes after a downward turn from mid-month when the Dollar reached its highest value since November 2022. Much of the fluctuation was due to uncertainty over the future of commercial trade after already seeing some friction between the U.S. and close partners. This weekend promises to be crucial as the White House has announced the levying of tariffs over Mexican as well as Canadian imports. We shall see how a resolution between the countries can be achieved.
Data from this morning showed December Personal Spending climbed faster than expected with a reading of 0.7% over 0.5%. Personal Consumption Expenditures rose as anticipated and are at 2.6% average annually. Equities may have a lot more action as earnings from large firms confirmed they are had mixed situations in the fourth quarter. We will have a clearer picture on tariffs likely on Monday.
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What to Watch This Week…
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MXN ⇑
The Mexican Peso is getting away from tumbling after yesterday’s major downfall following news that tariffs would be applied on the country’s exports towards the U.S. About 80.0% of all of Mexico’s exports go to the U.S. Diplomatic channels are being used to try and negotiate while it is not clear if they will be as high as 25.0%. In the meantime, other countries are preparing for their turn in having to readjust current trade agreements.
EUR ⇓
The Euro has also experienced a wild January, marked by recovery even as the European Central Bank continued to keep interest rates. This week proved that despite the need for stimulus, the Euro-zone’s outlook is not a pessimistic one. Per ECB’s Lagarde, inflation has been tamed and there is growth in the horizon. The President also felt good about new member nation, Bulgaria, solidifying trust for the complex monetary union.
