The U.S. Dollar is trading in weaker ranges following news of a more conciliatory tone between Chinese authorities and their population regarding protests over Zero-COVID policies.
Overview
While not all measures will be taken away nationally, the government has vowed to ease them in certain locations. Nevertheless, Southeast Asian nations such as Thailand and down in Australia are concerned that COVID has turned pathogenic, becoming a more serious virus as it evolved into something far worse than any other variant contracted. Cases seem to be growing as well as deaths.For now, the markets are reacting in a positive way, although American investors were hit with another dose of officials reminding them more hikes will come to interest rates. As inflation seems stubborn, some are saying the “panic buying” of the pandemic and hoarding seems to be easing. If demand starts heading down, so will inflation, but how quickly? That mystery will drive the volatility for the remainder of the year.
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What to Watch Today…
- No major economic events are scheduled for today
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EUR ⇑
The Euro has cooled off some following a rally against the buck based on comments that the European Central Bank plans to remain tightening and hiking down the line. ECB President Christine Lagarde spoke of the need to keep fighting price growth as well as deviating from the ultra-loose policies of the past that kept rates at zero percent or below. While we get a figure for the entire Euro-zone tomorrow, today’s Consumer Price Index figures out of Germany revealed some contraction, thus giving credit to the ECB to stay on course. Expect more jumps for Euro based on economic activity increasing and costlier borrowing.
GBP ⇑
The sterling is up primarily because of concerns about higher inflation to come. Bank of England member Catherine Mann explained that businesses’ expectations of inflation are higher than ever while Services are working with underlying inflationary expectations way above the 2.0% target, but more in 3-4%. That is dramatic as it bodes poorly for the concept of truly bringing inflation down to below-pre-pandemic levels any time soon. As of now, the buck is not being seen as a safe-haven.
