The U.S Dollar is trading in weaker ranges ahead of an awaited speech from Fed Chairman Jerome Powell later today at the Brookings Institute.
Overview
The comments shall start being reacted to around 1:30 PM. This event follows yet another day of Fed members basically guaranteeing that the Fed is not done hiking interest rates yet as “normalization” is nowhere near per typically hawkish Fed voting member James Bullard. Powell can be a mixed bag thus you will have volatility as he speaks about labor and clarifies the will for 50-basis-points moves.Today’s ADP Employment Change figures for November came in lower than expected at 127K added payrolls vs. 200K. Per the second revision of Q3’s Gross Domestic Product, the economy advanced 2.9% just slightly above the 2.8% estimate. Thus far, it looks like important data leading to believe demand is cooling off is materializing. Interestingly as well, Retail Inventories were expected to expand 0.5%, but instead contracted (-0.2%). Perhaps the Fed’s contribution to high borrowing costs is finally doing what intended. As we close November, it is imperative to note the buck is on track to having its worst monthly performance since 2010.
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What to Watch Today…
- No major economic events are scheduled for today
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EUR ⇑
The Euro rose this morning as China’s reopening and optimism outweigh concerns over the future challenges in 2023. European equities are about to close on two straight months of gains. Additionally, the Euro has been afloat in the midst of fears that an energy crisis would cripple nations’ abilities to fuel their economies as well as power the heating needed through winter. It looks as if the very worst imagined has been avoided, but progress in Ukraine remains to be seen as well as well as in production, which has taken a dramatic toll after delays on Russia’s intervention with wheat trade lines. We shall see if any Fed hesitation on Powell’s statements changes the trend.
GBP ⇑
Sterling has jumped along for the rally against the greenback as markets seem to be to welcome news of China’s easing on zero-COVID measures. Nothing specific to the U.K. is keeping the Pound afloat other than the belief that the economy could save itself from a deep recession. Regardless of Bank of England warnings, recent data points to an improved mood and expectations for the better. As long as the globe looks to be improving and no distraction from Rishi’s plans, Sterling has room to recover more ground from this year of big damage.
