The U.S. Dollar is trading in a mixed direction this morning, moving in opposite directions versus the Euro and British pound.
Overview
The Bloomberg Dollar Index is largely unchanged.Despite the quiet start to the fourth quarter, the dollar’s strength has been relentless in 2022 and is causing major pain across the globe. Over the past few weeks, we have been starting to hear chatter about a possible coordinated effort to stem the dollar’s advance. The White House denied such talks were in progress last week, but the speculation continues. We will be keeping a close eye.S&P’s Global U.S. Manufacturing PMI, construction spending, and ISM manufacturing will all cross the wire this morning. But this week’s focus is likely to be on the labor market. The JOLTs job opening report is due tomorrow. The main event will be Friday’s Non-Farm payrolls print. Economists expect that the U.S. economy added 265K jobs in September despite weakness in other parts of the economy. We will also keep an eye on revisions to August’s impressive 315K print.
What to Watch Today…
- Three separate manufacturing prints
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CAD ⇑
Commodity-based currencies were the big winners overnight. The price of oil has popped higher this morning following a report the cartel OPEC+ may cut its output by more than one million barrels a day at its meeting later this week. OPEC+ will meet in person for the first time in two years on Wednesday. A cut of 1 million barrels would be the biggest slash since the start of the Covid-19 pandemic. The Canadian dollar has gained a percent while the Aussie and Kiwi dollars have risen closer to 1.5% against the U.S. dollar.
GBP ⇑
The British pound is up half a percent against the U.S. dollar to start the quarter following news that the United Kingdom will nix the plan to cut taxes for top earners. Many talking heads have called the U-turn an embarrassment for the new government, but market participants have rejoiced.
The sterling led a relief rally of over 1% before giving back some of its gains. While the sterling is enjoying a reprieve so far today, there are many more structural challenges for the U.K. economy and the beleaguered currency.
