The U.S. Dollar is trading in mostly weak ranges against all peers across the board, with the Japanese Yen being the exception as the Pacific Rim nation faces political havoc
Overview
Indeed, this week starts off with the resignation of Prime Minister Shigeru Ishiba, forced as his grip on power started slipping after his political party lost a historical majority in the country’s legislative bodies. Additionally, the economy is facing tremendous pressures, and he was criticized over his agreement to a trade deal with the United States. Without any major piece of data today or tomorrow, the Buck will be at the mercy of geopolitical headlines.
Interestingly enough though, the Bureau of Labor Statistics will present a benchmark revision of establishment survey data through March. It is expected to likely show that labor deterioration has been brewing since before the latest disappointing Non-Farm Payrolls figures. This week’s main data points will gauge inflation for suppliers in the form of August Producers Price Index on Wednesday followed by Consumer Price Index on Thursday. On Friday, the week will close out with the University of Michigan Consumer Sentiment survey for September.
What to Watch This Week…
- U.S. PPI on Wednesday 8:30AM
- U.S. CPI on Thursday 8:30AM
- ECB Meeting Thursday
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇑
The Euro is trading at tight levels against the Buck, but looking upward as risk-market throughout the continent has picked up. Later this afternoon, the French government will hold a confidence vote that is forecast to put an end to Prime Minister Francois Bayrou’s government. We shall monitor the repercussions of whatever the result will be. Other than idiosyncratic issues to euro-zone member nations, all eyes will be on the European Central Bank as they gather on Thursday. While not expected to cut into interest rates, the tone of the press conference will be a factor in moving the needle for the shared currency.
JPY ⇓
The Japanese Yen has been losing ground as the world reacts to PM Ishiba quitting his post. Japan’s long-dated bonds immediately started to fall with traders concerned about the future of spending. The effects of political instability may affect Yen going forward with recent years being marked by lack of consensus amongst politicians, turmoil, and even the assassination of Shinzo Abe when he was Prime Minister. An aging population and changes to trade are a few of the items that have been dragging the Japanese economy, which managed to avoid a recession after a Q1 marked by contraction. We see increased volatility for the world’s fourth most held currency.
