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”

Dollar Softens in Wake of FOMC Decision

  • The dollar was unable to hang on to its post-FOMC gains after the Fed delivered a hawkish cut
  • With the November 16-17 APEC summit in Chile cancelled, US-China trade talks will continue over the phone
  • There is a full slate of US data reports; Colombia is expected to keep rates steady at 4.25%
  • Eurozone Q3 GDP and October CPI were reported; Turkey central bank released its quarterly inflation report
  • BOJ left rates unchanged; China reported weak official October PMI; Hong Kong reported very weak Q3 GDP Continue reading “Dollar Softens in Wake of FOMC Decision”
Dollar Mixed Ahead of FOMC Decision

Dollar Mixed Ahead of FOMC Decision

  • The dollar is treading water ahead of the FOMC decision; the Fed is widely expected to cut rates 25 bp for a third time in a row
  • Ahead of the FOMC decision, the US reports Q3 advance GDP data
  • BOC is expected to keep rates steady at 1.75%; Brazil is expected to cut rates 50 bp to 5.0%
  • December 12 elections are on in the UK; ECB is about to restart its QE purchases but Lagarde has already shifted the attention towards fiscal stimulus
  • South Africa will present its medium-term budget statement
  • Australia reported Q3 CPI data; Japan retail sales came in stronger than expected Continue reading “Dollar Mixed Ahead of FOMC Decision”

Dollar Firm as Two-Day FOMC Meeting Begins

  • The dollar continues to gain traction as the two-day FOMC begins; US political uncertainty has entered a new phase
  • Yesterday marked the third time that UK Prime Minister Johnson lost a vote for elections; he will try again today
  • Weak South Africa data support our call for imminent easing; the threat of sanctions against Turkey are back on the table
  • Lower than expected Tokyo October CPI was reported Continue reading “Dollar Firm as Two-Day FOMC Meeting Begins”