The U.S. Dollar has been dominating beyond most expectations as the globe copes with the reality of recessionary pressures that are expected with ongoing central bank monetary policy.
Overview
It is indeed surprising how strong the buck has become, especially how much pain major peers have taken along with Emerging-Market tender. The globe sees a changing dynamic when it comes to the ease of access to raw materials and other unfinished products. Inflation remains a painful reminder of the slap to the system that the pandemic created, and the war worsened.Oil prices are down to their lowest in 8 months while traders watch out for the key psychological level of $1,700.00/ounce of gold. As of now, no asset holds the power that the buck is enjoying from a privileged point of view. Both the Japanese Yen and the Chinese Yuan are also hitting fresh lows. Expect more concern across markets to keep all currencies subdued.
What to Watch Today…
- No major economic events are scheduled for today
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EUR ⇓
Euro continues to hit new low territory as the situation globally plays in the favor of the greenback with an economy mostly protected from the degreasing of the wheels of globalization. On the other hand, we still feel there will be a return to shared-currency gains. The European Central Bank meeting Thursday should be an opportunity to show some confidence in being able to revive economic activity even in the midst of countries trying to plan for a resource-hardened winter. No major jumps in the value of the currency will happen until there is relief in the fossil-fuel front.
GBP ⇓
The Pound is down as the world gets to assess the new leadership’s approach. Liz Truss, the new Prime Minister, seems committed to lowering taxes at a time when economists are suggesting, along with the Bank of England, to spend more from the fiscal side. We will be watchful of the popularity of her proposals and see if Sterling has more room to fall as doubts surround the new administration. Will there be a push for general elections to know off the Conservative Tory dominance?
