Update from North America

USD hits brakes after positive comments on conflict

2 min read

The U.S. Dollar is trading in mixed ranges this morning as risk aversion faded across global markets with the potential for some de-escalation in Middle East tensions.

U.S. President Donald Trump said Iran would not be attacked before the midterm elections and even cited “productive discussions.” Stock exchanges welcomed the news with Asian and European sessions in green territory, while Nasdaq 100 futures are up almost 1.0%. Meanwhile, the S&P 500 is likely to make a comeback after two straight days of losses. According to the Bloomberg Dollar Spot Index, the buck has enjoyed four consecutive weeks of gains.

The only data release left for the week comes out later at 10 a.m.: the October University of Michigan Consumer Sentiment Survey. Lately, consumers have grown more pessimistic about future conditions, and the measure has been trending downward since the end of July. The survey will also provide a reading on inflation concerns, but more comprehensive indicators will be available next week in the form of the Consumer Price Index. On Monday, Monex USA offices will be closed. Monex-Online will still be available.

What to Watch This Week…

The complete Economic Calendar can be found here.

EUR

The euro stopped falling after reaching a 17-month low against the USD with political turmoil dominating the headlines. Turmoil in France, including riots and violence, along with admissions of fiscal struggles in the eurozone’s main economies, has rocked the shared currency. Nevertheless, equity investors are showing a bit of resilience with the Stoxx 600 Index rising 0.9% and recouping part of its 1.3% decline earlier in the week. The euro’s 10-day losing streak marks its worst two-week performance since the end of May 2016 when traders were concerned ahead of the Brexit referendum.

MXN

The Mexican peso took a big dip yesterday afternoon after central bank meeting minutes revealed a “dovish” outlook for monetary policy. Minutes from Banxico’s previous meeting, in which officials voted to keep borrowing costs unchanged at 6.5%, showed that members were open to discussing the need to cut interest rates. The bank last changed interest rates on May 7, but the minutes showed that a majority of members viewed cuts as appropriate if inflationary pressures eased. Banxico’s next announcement is scheduled for November 5.