The U.S. Dollar is losing ground this morning with the belief across markets that inflation may have already hit its peak.
Overview
Although we will need to wait until tomorrow for Consumer Price Index figures, economists are already speculating that July numbers will represent the gauge’s biggest decline in two years. Earlier today, the NFIB Small Business Optimism Survey came out with a better reading than expected.Since strong economic data seems to help the Fed’s argument that hiking can continue, expect further volatility in equities. It seems that by now, the safe-haven arguments for the buck are diminishing as global pessimism has faded. The dollar has fallen by 2.0% ever since hitting a record in July, while equities have rebounded. We shall see if there are any surprises until the big inflationary risk tomorrow.
What to Watch Today…
- No major economic events are scheduled for today
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EUR
The Euro is trying to lift itself out of doom as Italian politics and a slowdown in the economy beleaguered the European Union. Italian alliances in the past few days have been initiated and broken as soon as they began. Leftists, Centrists, and Rightists seem unable to form a governing coalition. Additionally, European stocks fell with ongoing concern over the energy crisis and no major data to digest. Expect August to remain a mostly quiet month unless there is progress on the war front towards resolution.
GBP
Sterling has failed to make much progress against the buck following last week’s gloomy outlook for the U.K. economy. Even though Retail Sales have improved, the Pound remains subdued by the political headwinds of Britain as well as worry over legal action with the EU. Friday will be crucial as we get Gross Domestic Product figures for Q2.
