Daily Market Update

Week closes with slightly weakened Buck

May 10, 2024

The U.S. dollar is trading in familiar ranges as it has been throughout most of the week, with traders and investors digesting data and sentiment from Fed officials while markets regain their footing.


Earnings season seems to be over, and attention is on the growth prospects for countries outside of the U.S. that can put downward pressure on the Buck. China’s import and export figures came in better than expected, and inflation in Mexico convinced central bankers to stay away from cutting interest rates until they observe how the trend goes. The Dow Jones improved by 1.3% while the USD barely moved.

Next week, we will get plenty of indicators gauging inflation for both consumers and suppliers, retail sales, housing numbers, and regional surveys on optimism. Later today at 10 AM, we get a look at a May University of Michigan Consumer Sentiment slated to be less positive than the month prior. Geopolitically, there is a bit of a downpour on China’s recently improved mood after a report that U.S. President Joe Biden will be approving new tariffs on China across various imperative industries such as batteries and EV tech. We will likely see this trigger other FX moves bearing on the details.

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The Mexican Peso is likely to close out a winner for the week after Banxico decided to keep its 11.0% main interest rate unchanged, refusing to cut for a consecutive time. Inflation in Mexico has not been outrageous on a monthly or quarterly basis, but it remains a bit stubborn and too high, at 4.65%, for officials to feel comfortable with exercising an expansionary policy. With a renewed sense of global momentum, the MSCI Emerging Market Currency Index as a whole managed to climb by half a percent thus far this week. Next week will be busier in terms of having material to analyze and plan ahead.


The Euro is hoping to get away with a half percent bump for the month so far as we shut down a week that saw the U.S. economy’s strength be questioned. On the other side of the Atlantic, European leaders are coping with strong political challenges to the status quo, but economically, things are looking a little bit more hopeful. Equities are showing it, with the Stoxx 600 advancing by the most in a week in over three months. Later today, notes from the European Central Bank’s last meeting will be released that could perhaps reveal something to keep the shared currency afloat.


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