The U.S. Dollar is trading in mostly familiar ranges even as markets chew over the economic data just released in the U.S.
Overview
A busy morning that includes a decision by the European Central Bank has revealed that America’s economy is simply expanding with third-quarter Gross Domestic Product growth advancing 4.9% versus 4.5% expected. September Durable Goods Orders blew it out of the water, coming in at 4.7% when only 1.9% was estimated. It may be worth noting that the prior month’s figures were revised to a small contraction of (-0.1%), indicating a resurgence of demand to end the summer.Surprisingly, one of the Federal Reserve’s favored measures of inflation in the form of Q3 Personal Consumption Expenditures slowed down in pace to 2.4% while 2.5% was forecast. We have ending Home Sales figures out at 10 AM, while tomorrow we get September Personal Income/Spending and the University of Michigan Consumer Sentiment. Again, volatility may come at any point, but all other focus is on the geopolitical issues at hand after Israel reported troops’ entry into Northern Gaza. Domestically, equity sessions are looking sour over earnings and the overall uncertainty. A new Speaker of the House has been elected, Louisiana’s Mike Johnson. Thus far, Dollar is muted at the time of writing.
What to Watch Today…
- European Central Bank Rate Decision, Thursday 8:15 AM
- US GDP Q3, Thursday 8:30AM
- US PCE, Friday 8:30 AM
- Monex USA Online is always open
EUR ⇑
The Euro is not moving much after a much-expected decision by the ECB to hold interest rates where they are. Presently, ECB President Christine Lagarde is answering questions as she gives a press conference following the official meeting. She is currently addressing questions about how growing conflict around the globe can affect inflation. She explained that most measures of Core Inflation continue to decline, but there are still strong domestic price pressures.
She also added concern over fiscal policymakers not taking into consideration the inflationary effects of their measures. The ECB knows the economy is weak and manufacturing has fallen, but it seems like those things must be alleviated by others and not monetary officials.
MXN ⇑
The Mexican Peso is recovering and is among the biggest movers, with FX flows holding mostly steady at the moment. Unemployment and inflation came in low per indicators this week, suggesting the economy can handle any monetary policy decision, particularly holding interest rates for a while untouched. LATAM currencies may see a surge as they are more active and physically away from the hot-war chaos across the seas.
