The U.S. Dollar is trading in mostly negative ranges as markets react to reports of a peace deal potentially being good enough to end the armed conflict in Ukraine
Overview
We are still looking for details, but it is likely leaders will try to meet to discuss what it would take to sign it and end a conflict that has been going on since 2022. As far as markets go, the Buck is losing ground based on the increasing odds that the Federal Reserve will be cutting interest rates by 25 basis points when they meet on December 10th. At the time of writing, the probability increased to 80.0% that majority of voting members will be “doves.”
Equities continue to be focused on tech earnings with Nvidia and Alphabet now under the spotlight. September data points released today showed that Retail Sales came short of expectations while inflation for suppliers in the form of Producers Price Index is higher than anticipated. We shall see Durable Goods from September tomorrow. For now, the Buck is dwindling and could reach multi-month lows if the trend continues.
What to Watch This Week…
- Initial Jobless Claims Nov & 40week avg. 8:30AM on Wed
- US September Durable Goods Orders 8:30AM on Wednesday
- Holiday Hours: Weds (11/26), 8:30a-5p EST; Thurs (11/27), Closed; Fri (11/28) 8:30a-3p EST
- Monex USA Online is always open
GBP ⇑
Sterling is the fastest improving currency against the Buck, lifted by data in the U.S. serving as enough evidence to convince Fed members a 25bps reduction is appropriate. On the other side of the pond, all eyes will be on the Chancellor of the Exchequer and her revelation of the budget. It is possible that positivity behind it all can turn into appreciation for the Pound as the tax increases are overshadowed by spending that can improve life quality and thus increase demand, consumption, and overall activity.
JPY ⇑
The Japanese Yen is getting away from its weakest point since the year began. While finally improving, the last few weeks for Yen have been marked by depreciation accompanied by bad news regarding relations with China. The new Japanese Prime Minister Sanae Takaichi has been tough in some diplomatic stances lately that have represented friction with the world’s largest second economy. If trade is disrupted or anything else develops, it is possible for the Yen to go back to losing value.
