The U.S. Dollar is trading in tight ranges following the release of fourth-quarter (Q4) Gross Domestic Product data and other items elsewhere.
Overview
Economic growth in the second revision of Q4 GDP showed the economy advanced by 2.7% vs. the initial 2.9% registered, while Personal Consumption and Core Personal Consumption Expenditures were upwardly revised. In the case of PCE, the Fed’s preferred gauge for inflation, it is worth noting it jumped to 4.3% vs. 3.9% registered at first. This could ultimately solidify in investors’ minds that the economy is indeed good and worth investing in, but the Fed will remain willing to make borrowing costs more expensive since it can handle it.While more data comes our way tomorrow in the form of Personal Spending and Consumer Confidence, the buck is likely to hold steady as the globe adjusts its mindset following key speeches about the Russian invasion, now a year old. The global dynamics of trade and cooperation could be altered as countries realign their allegiances.
Of course, there is always the chance that the conflict subsides and a round of talks begins, but for now, the war will remain a long-term challenge. It is up to nations to figure out how to continue working in tandem while fueling their economies the best they can.
What to Watch Today…
- No major economic events are scheduled for today
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EUR ⇑
The Euro has depreciated some in the past few days but is likely to hold steady after inflationary data from January. Earlier, Consumer Price Index figures for the Euro-zone fell (-0.2%) just as expected while the year-over-year sits at 8.6%, a figure worthy of combatting with ongoing rate hikes. Things in Europe will certainly be affected more acutely as the Russia-Ukraine war continues. Of most importance now is the Euro-China relationship and how Germany and other nations react to the world’s second-largest economy keeping close ties with Putin.
GBP ⇑
Sterling is holding steady at the moment, but volatility could spike up as the U.K. runs into undesirable headbutting with the EU. While recent headlines suggested progress in reviewing the Northern Ireland trade protocol, a statement from Prime Minister Rishi Sunak sounded alarmed among trade negotiators because it seems the U.K. wants more control and is willing to exercise less flexibility than before. As trade woes remain, the U.K. economy remains in danger of growing very slowly, if at all, down the line. The pound is likely to remain under pressure with items unresolved that paint dark times and hardship ahead.
