The U.S. Dollar is trading in slightly more favorable ranges than last week following a holiday for this side of the Atlantic and a winter storm in the Northeast that left stores looking like the very start of the pandemic with completely empty shelves.
Overview
At the moment, the buck is gaining ground on concerns amongst investors that there will be more tightening from central banks sooner rather than later. Although many have already priced in the Fed’s planned moves, there is the belief that by now Omicron has peaked in its course, and the damage from here on should be minimal. Bonds are rising all over the place and oil prices are close to $85.0/barrel of WTI Crude.
It is likely the buck will continue this back and forth as central banks other than the Fed try committing to a year plan. At 10 AM we will get NAHB Housing Market Index and more construction-related items in the next few days. Earlier, the release of the Empire State Manufacturing Survey showed a major contraction reading of (-0.7) vs. the 25.0 expected; a sign that NYC and its region experienced way lower activity than expected.
What to Watch Today…
- No major economic events are scheduled for today
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EUR ↓
The Euro is declining somewhat despite good economic data out of the Euro-zone in the form of ZEW Survey Expectations. January’s reading of 49.4 s certainly a major jump from where it was during a tumultuous December by almost half. There is a robust feeling that prices will continue to go up and that could force a change towards tightening. Our expectations for Euro are good particularly because of the bad times it had last year and new projects as well as administrations on the horizon.
GBP ↓
Sterling is slightly down but could turn it all around with Consumer Price Index data featured tomorrow. A release of Unemployment figures came in close to expectation, with a rise in average earnings a sign of recovery from the previous reading. With labor experiencing similar pre-pandemic levels, t is safe to think the Bank of England could find merit for hiking rates in future meetings.
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