The U.S. Dollar is trading a bit stronger this morning with markets still concerned about perpetual inflationary growth and the recessionary pressures to come by design from central bank action.
Overview
Indeed, the news to share has been depressing lately as most traders and investors brace themselves for pessimistic outlooks, if not blurred futures.Although the buck is undeniably dominant, the U.S. economy is certainly taking a hit to growth, with Q2 Gross Domestic Product figures revealing an expected (-0.6%) contraction. Meanwhile, equities remain in a weakening trend as companies scratch their heads over the many questions to answer for the upcoming fourth quarter. Labor remains steady, with Initial Jobless Claims coming in lower than expected. We will get a look at Personal Consumption and the University of Michigan Consumer Sentiment tomorrow.
What to Watch Today…
- No major economic events are scheduled for today
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EUR ⇓
The Euro declined slightly as German authorities fear that criminal elements are now affecting the energy trade needed to guarantee the country’s stability as it faces many challenges. The country now also faces the need to borrow €200.0BN to finance a plan that will limit the negative damage of energy prices skyrocketing. Additionally, the entire Euro-zone is feeling the pinch, with the area’s economic confidence survey showing its lowest reading since 2020. As some analysts are putting it simply, there are not many assets out there trading in a constructive way other than the U.S. Dollar.
GBP ⇑
Sterling saw an upward swing yesterday, and it is currently trying to get away from depreciating following reaction to multiple takes on the situation in the U.K. Finance ministers, as well as the Prime Minister, Liz Truss, continue to defend their mentality and the budget implementation in their agenda. However, former Bank of England Governor Mark Carney followed suit with the IMF in criticizing the way lost tax revenue is not going to be supported or made up for in the current spending plans laid out.
Furthermore, other private business voices are echoing the sentiment that the current government is “undercutting economic institutions.” We have no vision for the U.K. at the moment, but this feels like a time for the opposition to make moves and counter the Tory administration, and elections would add even more volatility to the Pound.
