The U.S. dollar is generally softer today as equity futures ticked higher.
Overview
Stocks dipped yesterday as strong consumer spending and labor data suggested that the Fed will need to continue rate hikes. The dollar is headed for a small weekly loss after gaining the previous two weeks.
While markets are quiet ahead of the holiday, this morning’s economic data could spark some near-term volatility. In fact, the knee-jerk reaction was modest dollar strength. U.S. personal income rose 0.4% in November, beating forecasts of a 0.3% uptick. Personal spending was unchanged.
Perhaps the most important piece of data is the PCE inflation gauge which showed core pressure cooling. Month over month, core PCE rose 0.2% in November from October. The yearly number is up 4.7%, down from a 5.0% gain in October, according to the Commerce Department.
Later the University of Michigan consumer sentiment index and new home sales are due out. Treasury markets will close early at 2 p.m. Monex USA will close at 3 p.m.
What to Watch Today…
- No major economic events are scheduled for today
- Holiday Hours: Dec 23, Dec 30: 8:30a to 3p EST; Dec 26, Jan 2: CLOSED
- Monex USA Online is always open
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JPY ⇓
The Japanese yen eased overnight but is still set for an impressive 3% gain against the greenback this week. A key inflation gauge showed price pressures accelerated to the fastest pace since 1981. This has fueled expectations the Bank of Japan will be forced to join the rest major central bank counterparties and raise borrowing costs in 2023.
CAD ⇑
Commodity currencies were the biggest gainer in the quiet market overnight. The New Zealand and Australia dollars were the biggest movers, each gaining about half a percent against its American rival. The Canadian dollar also got a boost as West Texas Intermediate rallied 2.3% in thin markets. A report showed that Canadian GDP eked out a small 0.1% gain in November but matched estimates, so had little effect on the loonie’s movements so far.
