The U.S. Dollar is trading in mixed ranges, trying to erase some of the losses faced to begin the week and ahead of inflationary data to be released in the next couple of days.
Overview
Indeed, FX movements have been mostly muted as traders and investors await Producers Price Index figures for August out tomorrow while Consumer Price Index numbers come out Thursday. Later at 10AM, there will be a Revision of the Preliminary Benchmark Payrolls for Q1, which will give us an exact figure for job losses. It may help crystallize the need for a more consensus-driven approach to monetary policy as the Fed gets ready to start cutting interest rates. While this revision is not something new, it has never been more scrutinized and perceived as crucial.
As bets increase on a more expansionary monetary policy in the U.S. emerging-Market assets are having a moment with EM equities providing investors their best returns since 2017. The difference in focus over inflation and relatively high interest rates provides alternative sources of yield and profits. In addition to inflationary gauges, Friday will end the week with the University of Michigan Consumer Sentiment survey, key to understanding if there is optimism about the economic situation.
What to Watch This Week…
- U.S. PPI Tomorrow 8:30AM
- University of Michigan Consumer Sentiment, Friday 8:30AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇓
The Euro is falling in value as markets react to the developments in French politics after the Prime Minister was ousted. France is going through a period of dramatic friction, but the shared currency has not plummeted after potential for snap general elections was cut off. The National Assembly is in disarray as the country continues facing economic issues, fiscal discord, and tries to be a leader in confronting EU problems such as the Ukraine-Russia conflict. We shall see if pessimism within the European Central Bank on Thursday does anything to inflict further pain on the shared tender.
MXN ⇑
The Mexican Peso is currently muted but could possibly start climbing as the trading session progresses with inflationary data showing prices are certainly getting higher. August CPI confirmed that inflation pressures remain as the annual average is now higher at 3.57%. There is a chance that tariffs and other arrangements on trade can worsen inflation, which can make problems for policymakers. Banxico will meet in the latter part of the month on the 25th and are expected to be mindful of prices.
