Dollar Firm as US Returns from Holiday

  • With US-China talks ongoing, we got some good trade news from Europe
  • President Trump speaks before the New York Economic Club today
  • The UK Conservative party – and the pound – received a boost yesterday on news that the Brexit Party will not run against them in the elections
  • UK labor market data was mixed; German data continue to suggest small green shoots; Japan reported weak October machine tool orders Continue reading “Dollar Firm as US Returns from Holiday”

Dollar Mixed as Risk-off Impulses Take Hold

  • Markets should be prepared for negative headlines as we approach the endgame of the first stage of the US-China trade deal
  • Due to the US holiday, there are no US data reports
  • The political campaign in the UK has shifted into high gear; UK data came in largely weaker than expected
  • Spain’s election went roughly as expected: back to political limbo
  • Japan reported weak September core machine orders; China reported weak October money and loan data Continue reading “Dollar Mixed as Risk-off Impulses Take Hold”

Dollar Firm as US Rates Rise

  • The dollar continues to climb due to higher US rates and lower US recession risks
  • Discussions on tariff reductions as part of the Phase One trade deal seem to be progressing well
  • Spain’s election this weekend is likely to result in another stalemate and an even more polarized parliament
  • Japan reported firm September earnings and spending; RBA released its Statement on Monetary Policy
  • Moody’s cut the outlook on India’s Baa2 rating to negative; China’s October trade data was a welcome upside surprise Continue reading “Dollar Firm as US Rates Rise”
Will USD's Recovery in the Second Half of Last Week be Sustained?

Dollar Remains Resilient But Fresh Drivers Needed

  • The dollar remains resilient; Phase One of the trade deal may be delayed until December
  • Brazilian oil auctions were a disaster; Mexico October CPI is expected to remain steady at 3.0% y/y; Peru is expected to keep rates steady at 2.5%
  • German IP contracted -0.6% m/m in September; both the IMF and the EU warned of worse to come for Europe
  • BOE is expected to keep rates steady at 0.75%; Philippines posted stronger than expected growth in Q3
    Continue reading “Dollar Remains Resilient But Fresh Drivers Needed”

Dollar Rally Stalls as Fresh Drivers Awaited

  • US-China relations continue to improve with news of cooperation in a major fentanyl case
  • Eurozone final services and composite PMIs surprised on the upside; UK Parliament will be dissolved today
  • Poland is expected to keep rates steady at 1.5%; Russia October CPI is expected to rise 3.8% y/y
  • China sold €4 bn in its first euro-denominated bond since 2004; Thailand cut rates 25 bp to 1.25%, as expected Continue reading “Dollar Rally Stalls as Fresh Drivers Awaited”

Dollar Builds on Gains as Trade Optimism Grows

  • Reports suggest that existing tariffs may be removed as part of a Phase One trade deal
  • During the North American session, we get several US data points; Brazil COPOM released its minutes
  • The last of the October UK PMIs were reported; UK politics remain in flux and the signs aren’t good
  • PBOC cut its 1-year lending rate for the first time since 2016; RBA kept rates unchanged at 0.75%, as expected Continue reading “Dollar Builds on Gains as Trade Optimism Grows”

Dollar Firm as Trade Optimism Grows

  • Signs are still pointing to a Phase One trade deal in the coming weeks
  • Eurozone and UK reported final manufacturing PMIs
  • Moody’s lowered the outlook on South Africa’s Baa3 rating to negative; Fitch raised Turkey’s outlook to stable from negative whilst affirming its BB- rating
  • Philippine central bank Governor Diokno said easing for this year is over; Kiwi rose to a two-month high on positive trade developments Continue reading “Dollar Firm as Trade Optimism Grows”

Dollar Soft Ahead of US Jobs Data

  • The dollar remains on the defensive ahead of the US jobs report; ISM manufacturing PMI will also be reported
  • UK reported October manufacturing PMI; Nigel Farage will align his Brexit Party with the Conservatives for the upcoming elections
  • Both Moody’s and Fitch are scheduled to rate South Africa
  • Efforts have begun in the US Congress to limit US government pension fund investment in China
  • China Caixin manufacturing PMI surprised on the upside; Korea reported weak trade data Continue reading “Dollar Soft Ahead of US Jobs Data”

Mexico vs. Brazil Near-Term Outlook

Both Brazil and Mexico are in a good position to benefit from the current improvement in market sentiment. However, when comparing the factors driving the currencies of both countries, we think there are relatively more near-term positives for the Mexican peso than for the Brazilian real. Continue reading “Mexico vs. Brazil Near-Term Outlook”