The U.S. Dollar is up marginally against most G10 peers
Overview
The U.S. Dollar is up marginally against most G10 peers this morning, supported primarily by month end flows. Markets are generally pretty light today, given the context of the holiday, but yesterday’s Chicago Mercantile Exchange (CME) outage has resulted in even thinner liquidity than usual. With little activity to wrap up the month, all eyes are currently on next week’s releases of manufacturing, consumer sentiment, and inflation data and how they will impact decision making for policy makers going into the December 10th meeting. The current probability of a rate cut sits at 84.4%. Recent Fed rhetoric has been largely dovish, but a seeming lack of consensus among Fed members can’t be ignored.
What to Watch This Week…
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CAD ⇑
The Canadian Dollar is up against the Greenback this morning to its best position in about a week and half on the back of a blowout GDP print. Third quarter GDP increased at an annualized rate of 2.6% versus an expected 0.5%, driven primarily by increased Government spending on defense and investment in residential housing, more than offsetting the second quarter’s decline of 1.8%. Exceeding expectations to such a degree supports the case that the Bank of Canada will cease quantitative easing for now.
