Though markets were quite muted as a result of the US holiday yesterday, the United States Dollar still traded in shallow waters with a slightly negative tinge that continues into today.
Overview
The focus was on data from Europe, mainly, as traders changed their central question for the Eurozone from if the region will enter a recession to when and just how severe any contraction will be. PMI data from the region supported this new line of questioning, posting a negative reading for the sixth straight month, but not quite as negative as some expected. The same figure from the US is due out later this morning, which will likely be the primary driver of price action through today.Elsewhere, the four-day pause in hostilities between Israel and Hamas began early this morning and seems to be tentatively holding so far today. Hamas is expected to free the first group of hostages around 4 PM local time today, and Israel has said it will respond in kind and release 39 Palestinians from prison Friday as well. All prisoners are expected to be women and children. If this de-escalation can pave the way for real peace talks after this temporary ceasefire ends, the global mood will undoubtedly improve substantially and could lead to a weakened US dollar to wrap up the year.
What to Watch Today…
- US Preliminary November PMI, Friday 9:45AM
- Holiday Hours: Today – Friday, Nov 24, 8:30a-3p EST
Monex USA Online is always open
GBP ⇑
Pound Sterling to start the morning is gaining ground against both the Dollar and the Euro as data showed a surprising rebound in confidence from the UK consumer in November, just in time for the holiday shopping season. The Bank of England’s chief economist Huw Pill also spoke with the Financial Times and emphasized that the central bank will “persist” in its battle against stubbornly high price pressures, adding some doubt as to whether there may, in fact, be yet another rate hike on the table.
AUD ⇑
Even as oil prices fell on easing tensions in the Middle East, the Canadian Dollar has gained against the USD to the tune of a quarter-percent this morning. Retail sales data for the month of September surprised to the upside this morning, growing 0.6% on a monthly basis compared with flat expectations. After showing a small contraction in August, the Canadian economy is not out of the woods when it comes to recessionary pressures, but this morning’s release is a much-needed positive sign.
