The U.S. Dollar strengthened and has reached multi-month highs against major peers as markets jump towards safe-haven assets with concerns over high valuations and market concentration.
Overview
With close attention paid to technology firms and their earnings, disappointment for company Palantir was taken as a signal that the fast growth in the sector may be fading.
Additionally, private data gauging Manufacturing in the U.S. from the Institute of Supply Management marked October as the eighth consecutive month of contraction. Per surveys, managers explain that they face delays in deliveries of imported goods, which is affecting the demand for new orders. With negative headlines, the Buck is benefitting and setting a new high since July per the Bloomberg Dollar Spot Index.
As of now, the Buck is enjoying its best levels against Euro since start of August, strongest against Mexican Peso since first days of September, and its highest point over British Pound as well as Canadian Dollar since April. We shall see if any news emanating from Congress that would put an end to the government shutdown can change the tide. For now, the Yen is the only exception to the Buck’s current rally, overcoming the weakest Yen value since February.
What to Watch This Week…
- ADP Employment Change on Thursday 8:15AM
- Banxico Meeting on Thursday
- Monex USA Online is always open
EUR ⇓
The Euro fell to a new low not seen since early August as markets reward the Buck for the “hawkishness” from the Fed meeting while risk appetite also dwindles. Although no data is out today, tomorrow we will see the release of October’s Purchasing Managers Index figures as well as inflation for suppliers in the form of September Producers Price Index. Retail Sales will follow on Thursday. Expectations are that indicators are on the expansionary side and looking positive.
CAD ⇓
The “Loonie” is down to its lowest value since April 1st, marking a 3.1% depreciation since the second half of the year started. Weak economic numbers leading to recessionary pressures and uncertainty over trade and relations with its biggest partner have plagued sentiment over CAD. It is worth recalling that prior to this year, the country ranked last amongst the world’s top 50 economies since 2019, highlighting long-term issues that have affected the perception of the country as a beacon for prosperity.
