The U.S. Dollar is trading in familiar ranges as this week has been characterized by geopolitical talks and reaction to earnings reports from large retailers
Overview
Things are relatively quiet ahead of tomorrow’s much-awaited statements from Federal Reserve Chairman Jerome Powell at the Jackson Hole symposium, in which markets are hoping there is indeed signal that Fed officials will be cutting interest rates soon. Many economists are doubtful of the sentiment across markets that the Fed will turn towards looser monetary policy especially as they can continue to argue that inflation remains somewhat “sticky,” and not necessary yet for stimulating growth with an interest-rate slash.
Meanwhile, leaders from the U.S. and across Europe are hoping there is progress for finding a resolution to the Russia-Ukraine conflict with a ceasefire the more realistic goal if both combatants agree to sit and discuss potential peace. In terms of data, Initial Jobless Claims came out higher than expected for the week of August 16th. Later at 9:45AM we will get Purchasing Managers Index and Existing Home Sales at 10AM. Tomorrow there will not be indicators so we will see how much impact Powell has in aiding or sinking the Buck’s value after a mostly muted week in FX.
What to Watch This Week…
- Jackson Hole Symposium on Friday
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇓
The Euro is flat at the moment following a report this morning that the European Union and the U.S. have reached an agreement on a joint statement outlining their trade deal. We shall see if a combination of optimism over Russia-Ukraine developments and good economic numbers propel the Euro higher in value. HCOB Euro-zone Purchasing Managers Index came out more positive than expected for the August survey with a surprise in Manufacturing which came out at an expansionary reading above 50.0 (at 50.5) that indicates there is progress instead of contraction as was estimated 49.5. This meant a boost for the Composite-reading which is at 51.1 vs. 50.6.
MXN ⇑
The Mexican Peso is also floating in mostly tight ranges, but it is currently the exception to all other pairs as it is up slightly against the Buck. It is counterintuitive though as data earlier showed a worse contraction than expected for June Retail Sales of (-0.4%) vs. (-0.2%). Thus far not a ton is making a dent or influencing MXN. Later at 11AM, we will get a look at Banxico minutes from their last meeting in which they reduced interest rates from 8.0% to 7.75%. Willingness by policymakers to be “dovish” has not necessarily translated into losses for Peso, which has experienced a “super” year, thus far.
