The U.S. Dollar is trading in mostly familiar ranges against most currencies, but against its North American peers it has experienced a rally following commentary regarding tariffs to come.
Overview
Canadian Dollar and Mexican Peso is a result of promises by President-elect Donald trump to levy as much as 25.0% on all products imported from Mexico and Canada.
He also explained that he would like to see an extra 10.0% applied to Chinese exports headed our way. In equity markets, shares for American automakers such as General Motors felt the most pain in premarket trading. Volatility in markets is starting to spike with the rhetoric and guesses on how to adjust.
While we have this month’s Consumer Confidence figures out at 10AM, traders and investors will be mostly awaiting the FOMC Minutes from the last meeting scheduled at 2PM. In it, they will look for commentary about confidence in the economy and any mention about concern for inflation to exacerbate in the near future. Gross Domestic Product, Jobless Claims, as well as Personal Consumption Expenditures will be out tomorrow. Markets will be closed on Thursday for the observation of the Thanksgiving holiday while “Black Friday” closes out with few global data points.
What to Watch This Week…
- FOMC Minutes 2PM
- US PCE, GDP on Wednesday
- Monex USA Online is always open
EUR ⇑
The Euro has been able to hold on to its early week gains as the week starts to see some activity dwindle ahead of the Thanksgiving holiday and closing of American markets. While most enjoy a meal, Confidence figures from all sectors will be out for the Euro-zone and Friday we get detailed inflationary figures as Consumer Price Index is released. Eyes will be watching how much stock markets in Europe can be negatively impacted by the idea of more trade barriers between the two largest global economies.
MXN ⇓
The Mexican Peso dropped by over 1.0% against the Buck, naturally falling in value as tariffs would be a dramatic shock to the current free-trade agreement and overall economy. The current rate of exchange is just around levels seen only two weeks ago, but there is no doubt we may enter high overnight volatility once again with traders coping with the likelihood of much higher trading costs. 79.0% of Mexican exports are U.S.-bound.
