The U.S. Dollar is trading in mostly familiar ranges after slightly improving overnight against some major peers.
Overview
All eyes are focused on the impact to be had with a planned meeting between Middle East leaders and U.S. President Joe Biden taking place in Jordan along with traveling to Israel starting Wednesday. China will also host key leaders from other nations, including Russia, during a Belt-&-Road Initiative forum. Markets are all over the place, with commodities swinging while treasury yields rise.
At the time of writing, the Buck rallied after September Retail Sales came out better than expected, registering a 0.7% expansion over the estimated 0.3%. This adds to the economic performance divergence with the rest of the globe, which is feeling more pressure from the development of conflicts and supply gluts.
While chances of a Fed interest-rate hike may have risen some, a few Fed officials, such as Philadelphia Fed President Patrick Harker, have waived red flags over the hawkishness. The mid-Atlantic official explained that talks between him and businesses have concluded with leaders detailing the need to prevent further surges in borrowing costs as they fear they may not make it long-term. Volatility is the only thing guaranteed as we face yet more challenges.
What to Watch Today…
- Inflation for Euro-zone and U.K. Wednesday
- China’s GDP Wednesday
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EUR ⇓
The Euro started losing ground as soon as the release of U.S. Retail Sales demonstrated the positive and immediate effect good indicators have in aiding the greenback over all else. Along with geopolitical anxieties, the Euro-zone will see just how stubborn inflation remains as September’s Consumer Price Index readings come out tomorrow. Other than domestic data, the Euro will more than likely also be influenced by the Chinese Gross Domestic Product numbers scheduled for the overnight sessions. It is worth noting that elections in Poland have resulted in a change of the guard that is welcomed by free markets, thus, Polish Zloty has improved by over 5.5% thus far for October.
GBP ⇓
Sterling is down by over half a percent today following weaker readings for the labor sector than forecast. September Monthly Change of Payrolls saw a contraction of (-11K) jobs when an expansion of 3K was expected after a major reduction of (-8K), the month prior. Furthermore, August figures for Average Weekly Earnings slowed down to 8.1% from 8.3%. Altogether, this shows that the Bank of England was right in its assessment of a cooling economy that they need to carefully monitor while not denting any longer with interest-rate increments. With tightening likely to stay a longer monetary policy stance in the U.S., prospects for the Pound are looking poorly with a mix of pessimism over economic well-being.
