The U.S. Dollar is closing out the week in slightly favorable ranges after days of a mix in moods from day to day.
Overview
All eyes are on the Jackson Hole Symposium today, particularly starting at 10 AM when Fed Chairman Jerome Powell is expected to give remarks. Throughout the past few days, markets have swung from optimism to negativity while trying to figure out how the second half of the year will be with regions growing at different paces or, in the case of Europe, not growing at all.
Chinese stimulus in the form of relaxed mortgage policies failed to sustain a rally in equity markets that only lasted 10 minutes. The fear is that China is facing too many obstacles to get back to its pre-pandemic dynamics, and recent geopolitical disputes have reversed decades of cooperation with the United States.
Meanwhile, investors and traders want to make sense of the high borrowing costs currently being faced while wondering about the future of inflation without central bank hawkishness to combat it. At the same time, Iron ore improved to its best price since June as China’s Construction is expected to pick back up starting this fall. The messages are all over the place, so we are hoping for some guidance and insights from the decision-makers today. Wild markets are hard to tame.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
EUR ⇑
The Euro is actually recovering after having dipped below its weakest levels since mid-June during overnight European and Asian sessions. Data out of the Euro-zone’s largest economy came in, showing that German economic growth just is not happening. Q2 Gross Domestic Product stayed at 0.0% for three months while the annual GDP rate now stands at (-0.6%). Ifo surveys of producers and Business Climate revealed a poor assessment with uncertain times ahead. It is indeed clear that the Euro-zone is dragging, and Christine Lagarde, European Central Bank President, must address it.
CAD ⇓
The Canadian Dollar is trading at its weakest point against the buck since the end of May. With everyone focused on Jackson Hole, the Bank of Canada will observe just how confident Powell feels about the future in order to call for further interest-rate hikes. The BOC decided to add to its benchmark rate by 25 basis points when they last met, keeping in line with Fed mentality. The question is if heading that path is the right decision and one that other officials will agree with. We get a look at Canada’s GDP figures next week.
