The U.S. Dollar is trading in tight ranges this morning as the globe digests news of economic progress with the sour note that hospitalizations and infections are increasing in the European continent.
Overview
A combination of poor ventilation in buildings, particularly schools, along with lower rates of vaccinations is being credited for a resurgence. Health officials on the other side of the Atlantic are warning us to continue maintaining high cleaning standards and to remain socially distant as much as possible.With the holidays just around the corner, the idea of asking people to gather less will be tough, but clearly, a lack of consistency in each nation, especially Eastern Europe, is to blame. We also need to get our situation together or there is a risk of winter lockdowns per state, a detriment to our national push for production and activity to normalize.Markets are speculating on what the Fed might act like with another leader at the helm as traders wonder the chances of nomination for Fed member Lael Brainard. Ms. Brainard, with the Federal Reserve Board of Governors since 2014, is widely viewed as a very dovish official. In fact, a revelation that she was interviewed for Fed Chairwoman has already caused a plunge in the two as well as well five-year yields. Almost 80.0% of economists surveyed by Bloomberg believe Powell will return, but doubt is growing in some circles.
What to Watch Today…
- No major economic events scheduled for today
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EUR
Euro levels are holding steady for now despite a doubling-down of reiteration from financial decision-makers that the environment does not need deep cuts to stimulus nor planning of any interest rate hikes. Once again, Chief Economist Philip Lane and European Central Bank President Christine explained that it would be “counter-productive” to tighten policy at a time when the recovery remains at risk.
Another Governing Council member of the ECB explained that conditions for hikes will not be met until 2022, but that it does not need to happen when the Pandemic Emergency Purchase Emergency is fully eliminated. There are some officials saying inflation is worrisome, to not sleep on it, but Lagarde remains convinced it is all transitory.
CAD
The “Loonie” is trying to recuperate loss ground, although movement right now has been limited. The global recovery going strong can be a boost for CAD as oil prices continue rising and some speculate could get closer to WTI $100.00/barrel in the coming months. Additionally, the Bank of Canada’s chairman Tiff Macklem stated yesterday that high inflation can be transitory, but not short-lived so the BOC is fully committed to maintaining inflation under control.
We shall see if this determination translates into more CAD value.
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