The U.S. Dollar is trading in mostly favorable ranges to begin November after a weekend that eased concerns about trade between the world’s two largest economies.
Overview
Indeed, China and the U.S. seem to be messaging the globe that the fast decoupling of the two powers that markets have been worried about may not happen at all.
While national security remains a reason both cite when disagreeing with each other, there is no quick way to separate as they have both become engines for one another as well as for the rest of world. Although there were swings throughout the month of October, the value of both on-shore as well off-shore Chinese Renminbi closed out within just a few tenths of a percent. Per the Bloomberg Dolar Spot Index, the Buck managed to have a second month for recovery for the year, climbing 1.7%.
Without eyes on official economic data, the probability of the Fed lowering interest rates has remained at 60.0% since last week. While we have a calendar full of indicators, we are still in the darkness with the U.S. government shutdown. The narrative is being carried by successes on the international front, but any updates to the domestic situation in Congress will certainly affect market direction. For now, ADP employment on Wednesday will be crucial, out at 8:15AM.
What to Watch This Week…
- Euro-zone CPI, Friday
- Banxico meeting on Thursday
- Monex USA Online is always open
EUR ⇓
The Euro is once again down to the Buck, reaching a fresh new low since mid-July of this year after a week and a half of deterioration seeing decline by over 1.0% and still going. Although economic data was positive out of the Euro-zone and numbers for this week promise to only enforce that good vibe, covering everything from inflation to Purchasing Managers Index, and Retails Sales. While the Buck stays lifted because of the Fed “hawkishness,” continuous improvement on the other side of the Atlantic may translate into quick gains for the shared currency. Strong-dollar moves have proved fleeting and short-lived throughout 2025.
MXN ⇓
The Mexican Peso is down to its weakest point since the first week of October, down as a result of poor figures detailing a downward shift from a growing economy to one facing contraction. This week will give plenty of chances for strong MXN moves as some key data points will be released. There is a survey of central bank economists, statistics on remittances, Manufacturing gauges, Consumer confidence, Investment, as well as Consumer Price Index by the end of the week. Banxico will meet on Thursday and is highly expected to cut by 25 basis points, however, a “dovish” dive towards 50bps is not far-fetched considering the poor performance of the economy lately.
