The U.S. Dollar is trading in favorable ranges closing out a week of record momentum against peers all across the board.
Overview
The lack of optimism over what seems to be a bleak economic future has caused equities as well as other assets to dwindle. It is indeed during this time of havoc that the buck keeps thriving. Commodities have also generally declined as recession expectations have spiked in most places, if not, consumers and businesses have declared it is a recession already. The lack of confidence in the economy is evident, however, today’s labor figures help in advancing the Fed’s argument for hiking interest rates.
The Change in Non-Farm Payrolls for June came in 327K over 265K, Average Hourly Earnings came in as expected and the Unemployment Rate was unchanged at 3.6%. Fed Chairman Jerome Powell has defended the path to higher borrowing costs while warning that the economy may cool down naturally as a result, but the strong Employment Situation give officials room to say that the economy is able to manage. It is now more likely that the Fed will increase interest rates by 75 basis points at their July 27th meeting. The buck continues its dominance as the markets accept a steadier situation in the U.S. than in other regions.
What to Watch Today…
- No major economic events are scheduled for today
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GBP
Pound is down, as are others, based on the unbreakable strengthening of the buck and with the U.K. going a leadership change. Boris Johnson has plans to remain as caretaker until October to guide the next Prime Minister to take hold of office then, however, he is now under pressure to completely exit sooner rather than later. Conservatives are already trying to quicken all needed to call for a much earlier contest and have an established new PM before summer closes. The scandals preceding the resignation have alarmed some more than others within Tory circles, demanding that someone be elected as soon as possible.
JPY
The Japanese Yen has not improved as it continues to trade around its weakest levels in over 24 years. The markets overnight were also building momentum as China had announced plans for a major infrastructure spending package amounting to 1.5 trillion Yuan ($220.0BN). This all was interrupted by the shock that arrived from the awful news of former Prime Minister Shinzo Abe’s shooting during a speech and his eventual passing at a hospital treating his injury. From 2021 to 2020, Abe was the longest-serving PM in Japan’s history. He was 67 years old. We mourn this inexplicable tragedy.
