The U.S. Dollar is trading in stronger ranges against its G10 peers this morning ahead of Consumer Confidence at 10am.
We will also hear speeches from several Fed members later today and President Trump will give a State of the Union address this evening. The Supreme Court’s decision to overturn President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to justify tariffs has injected another dose of uncertainty into the markets, with the European Union pausing the process of ratifying last year’s trade deal with the U.S. The EU’s concerns revolve around the potential for “stacking” tariffs under Section 122, thereby bringing tariff rates above what was agreed upon. Elsewhere in geopolitical uncertainty, there is continued speculation around a potential US strike in Iran amidst ongoing discussions. Escalations there have driven crude oil to it’s highest intra day price since July and boosted investment in U.S. Treasuries as Traders sought safe havens.
What to Watch This Week…
- Factory Orders and Durable Goods 10AM
- Conference Board Confidence tomorrow 10AM
- PPI January figures Friday 8:30AM
- Monex USA Online is always open
JPY ⇓
The Japanese Yen is the G10’s biggest loser versus the Greenback following a headline from Prime Minister Takaichi where she expressed reservations regarding additional rate hikes by the Bank of Japan. While she has been more vocal about responsible fiscal policy since her LDP took the lower house of the Diet by storm, any suggestion that that she is constraining the BoJ’s independence would counteract that.
GBP ⇓
The British Pound is trading in lower ranges against the Buck this morning amidst an increase in unemployment and less pronounced inflation. Governor of the Bank of England, Andrew Bailey, has stated that he doesn’t see the need for further rate cuts, but that the major question is whether or not inflation will feed into expectations.
