The United States Dollar is trading in fairly calm waters this morning with a slight positive tinge following the release of US PPI this morning.
Overview
If the Buck manages to close out today in positive territory, it will mark the longest winning streak for USD since March of 2020 when risk assets bottomed out and the Dollar won big in the early days of the COVID pandemic. The Bloomberg Dollar Spot Index is up 0.5% on the week, and is heading for its second straight week of gains. After US CPI yesterday came in slightly above expectations, markets are once again cutting their expectations of easing from the Fed back substantially.
This morning’s PPI release was, all things considered, fairly benign. Prices paid to US producers in the month of September were flat compared with August. Prices excluding food and energy grew 0.2%, on market expectations. The measure excluding trade, as well, was slightly under expectations at 0.1% monthly. The annualized core reading, however, unexpectedly ticked higher than last month’s release, which was also revised upward. All told, the release was a rather mixed bag and market reaction to it is quite muted. Attention is now shifting to the next iteration of central bank meetings, beginning with the European Central Bank next week.
Risk assets are attempting to rebound a bit this morning, and US equities are opening very close to flat after several sessions in a row of high-volatility trading. Oil prices are down slightly, but gold has continued to gain ground as investors search for further hedges against sustained geopolitical risk.
What to Watch This Week…
- University of Michigan Consumer Sentiment, Friday 10AM
- Monex USA will be closed Monday, October 14 in observance of the Indigenous People’s Day banking holiday
- Monex USA Online is always open
JPY ⇓
Japanese Yen’s recent woes continued this morning, as the continually volatile currency slid a further third of a percent against USD. JPY is, today, capping off a slide of nearly seven percent against the Buck over the last month following several about-faces from both US central bank officials and Japan’s own currency and monetary policy officials. After the Bank of Japan’s surprise interest rate hike in August sparked a bout of wild market panic, the BoJ along with Japanese politicians have espoused that they will be showing quite a bit of restraint on normalizing monetary policy moving forward.
MXN ⇓
Though trading fairly flat on the morning today, the Canadian Dollar is the week’s worst performer against the Dollar inside the G10. Canadian employment data for September was released this morning, and unexpectedly beat expectations, posting a positive net change in employment and an unemployment rate that came back down to 6.5% on expectations of 6.7%. These figures are helping stem the bleeding for CAD, but the Loonie has still been on a steady decline this week and is trading nearly 2% weaker against the Buck than it was at Monday morning’s open.
