The U.S. Dollar is trading in mostly familiar ranges as U.S. markets get back to full throttle following Veterans Day and progress towards putting an end to the U.S. government shutdown.
Overview
Markets are most certainly awaiting resolution news out of Washington, which have historically benefitted risk-appetite. In the last four times when there was a federal recess since 1995, when the return was announced the S&P 500 Index value rose with the exception in 2018. With the 43rd day marking the moment when congress will vote on a spending deal, markets are hoping there is a spark after doubts about the economy have risen because of private gauges revealing struggles in the labor sector accompanied by announcements from big brands about rounds of layoffs.
We will get some commentary from Fed officials and Treasury Secretary Scott Bessent as a joint conference later today may lead to some speculatory questions about where monetary policy is headed considering the most recent issues and lack of data crunching for the past seven weeks. We shall see how the likely end of the shutdown will lead to the release of monthly and weekly statistics. As far as Consumer Sentiment is concerned, consumers are feeling the most pessimistic in about three and a half years. We will look for the potential of increased odds that the Federal Reserve chooses to cut interest rates at their December meeting. Thus far, there is no clear direction for the Buck as the world reacts to fast developments in the middle of a busy week
What to Watch This Week…
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CHF ⇑
The Japanese Yen fell to its weakest point against the Buck since the end of January after commentary from the recently elected Prime Minister regrading monetary action. The Bank of Japan will not meet until December 19, but already there is friction between policymakers and the PM about what path to take. Ever since the last interest-rate hike in January, markets have been waiting for the BOJ to add to borrowing costs, but it has not materialized as officials cited uncertainty across markets and concerns with overall inflation. PM Sanae Takaichi wants to have loose monetary policy side by side with willingness to spend and boost the economy. After asking for more regular reporting to the key economic panel, it is anticipated that the country’s leader will put pressure on members to aid in her vision.
JPY ⇓
The Japanese Yen fell to its weakest point against the Buck since the end of January after commentary from the recently elected Prime Minister regrading monetary action. The Bank of Japan will not meet until December 19, but already there is friction between policymakers and the PM about what path to take. Ever since the last interest-rate hike in January, markets have been waiting for the BOJ to add to borrowing costs, but it has not materialized as officials cited uncertainty across markets and concerns with overall inflation. PM Sanae Takaichi wants to have loose monetary policy side by side with willingness to spend and boost the economy. After asking for more regular reporting to the key economic panel, it is anticipated that the country’s leader will put pressure on members to aid in her vision.
