Daily Market Update

Quiet week ahead, Buck still down slightly

November 06, 2023

The U.S. Dollar is trading in mostly tight ranges to start off the week, following key events last week that served to provide some guidance into the near future.

Overview

The Federal Reserve chose not to increase interest rates any further and may leave things alone for a little while as they monitor economic indicators suggesting there is a cooldown happening. The chances for a long pause on monetary policy action has been welcomed by equity exchanges, which are facing anxiety over earnings and the escalation of armed conflict now in various regions of the world.

While some focus will be given to weather this is bear market rally or not, few data points will be out this week that can have some impact. We will get the Reserve Bank of Australia meeting and decision tomorrow, a look into German inflation Wednesday, U.S. Initial Jobless Claims Thursday, and U.K. production figures Friday. We will be at the mercy of headlines, as for now, plenty of the most watched risk event are behind us. Pay attention to labor as we close out the year and see if it is a chink in buck’s armor.

 

What to Watch Today…

 

 

EUR ⇑

The Euro will be tested on its ability to sustain recent gains as some data this week explores September and October advancement. Euro-zone Purchasing Managers Index figures for October came out earlier showing suppliers performing as expected with expansionary readings out of Spain. We will see Producer Price Index numbers from September and Wednesday look into Retail Sales. We will see if any news develop out of the Ancient continent, which has also turned its focus on how to alleviate the heated situation in the Mideast.

 

GBP ⇑

Sterling is also looking to hold on to its recent uptick following key central bank decisions. To elaborate further, Bank of England Governor Andrew Bailey will be giving a speech on Wednesday. Meanwhile, we will also watch for comments from the Fed’s own Jerome Powell on Thursday that may further hurt the dollar if he doubles down on dovishness. At the moment, chances for a hike by the BOE in December stand better odds than action from the Fed.

 

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