The U.S. Dollar is looking steady while losing some ground against some major peers such as Euro and Swiss Franc.
Overview
While markets remain in search for optimistic news, much of the world’s focus continues to be on the Mideast conflict that escalated further this week with more tragedy and no sign of path towards a cease-fire.
The diplomatic efforts by the U.S. and other leaders did not create a sense of immediate peace and doubts are growing about the duration and intensity of the war. Combined with Russia-Ukraine, there is an overwhelming lack of clarity about what else is next to come and equities are feeling it, with all exchanges in the red as of this morning. Even oil prices are down. It is indeed aiding the buck in staying afloat against most peers.
Data-wise, there is not much left to look forward to after seeing economic growth in China impress with third-quarter Gross Domestic Growth advancing 1.3% versus 0.9%. We will see Japan’s Consumer Price Index figures tomorrow and domestically will await comments from Philadelphia Fed President Patrick Harker, who earlier this week made waves explaining there is growing pessimism amongst business leaders who are hoping for looser monetary policy.
What to Watch Today…
EUR ⇑
The Euro is up over the buck after seeing economic indicators that beat their estimates in confidence as well as inflationary advancement. CPI for the Euro-zone expanded, keeping the annual average above 4.0% thus making it more likely that the European Central Bank will not be cutting interest rates anytime soon. It would come as a big surprise if the ECB hiked its benchmark rate in any of the next two meetings left for the year, with odds standing at 13.0%, but it is worth noting that two weeks those chances were in negative territory. For now, the shared currency has halted its decline against the dollar and there is room for appreciation.
GBP ⇑
Sterling is holding mostly steady following data that also makes it unlikely for the Bank of England to cut interest rates and keep borrowing costs high for longer. Inflation high for both consumers and suppliers means the BOE will be very data-dependent and cautious about doing anything. Chances of another hike happening before end of the year stand at 30.0%. Rishi Sunak, the Prime Minister, will be visiting Israel in hopes of alleviating the situation and getting Arab nations involved.
