The U.S. Dollar is moving in mostly tight ranges to start a week characterized by the G-20 Summit in Brazil and accompanied by data measuring inflation regionally.
Overview
After seeing evidence that price-growth remains a feature in the U.S. economy last week, the next business days will give us a glimpse of how inflationary pressures are affecting other nations and the overall global stimulus narrative. If central banks are uncomfortable with inflation, they may not be willing to exercise loose monetary policy via interest rate cuts, which could exacerbate it. As far as we are domestically concerned, chances for Fed lowering borrowing costs are all falling in outlooks for 2025.
Commentary from the gathered G-20 leadership is likely to move market mood. Equity markets have slowed down after rallying big time post-U.S. elections, but Bitcoin continues to be a solid “Trump” trade with crypto enthusiasts excited about pro-crypto pledges. Gold, a hedge against turbulence in markets, rose by 1.0% over the weekend and it is likely to hit a new record price by the end of the year as well. We will have global price data throughout the week, which will close out with the University of Michigan Consumer Sentiment and Purchasing Managers Index on Friday.
What to Watch This Week…
- Euro-zone & Canada CPI, Tuesday
- University of Michigan Consumer Sentiment Friday
- Monex USA Online is always open
MXN ⇓
The Mexican Peso is still trying to rebound after dropping to its lowest point against the Buck in two years. There will be opportunities to change the trend with economic indicators in Retail Sales for September on Thursday and Q3 GDP on Friday. With tariff-talk overtaking most other concerns, inflation numbers will also be interesting to watch when CPI is released at the end of the week.
EUR ⇑
The Euro continues to be trading around its weakest levels since Q4 of 2022 but could see better fortunes based on data out this week. The Consumer Price Index for October will be out tomorrow followed by Construction Output on Wednesday. November PMIs will be released Thursday and are expected to mark an expansionary ready. If this does not occur, the shared currency may indeed hit fresh new lows. Middle of the week, we will also get word from European Central Bank President Christine Lagarde and her VP Luis de Guindos as they address policy questions.
