Diplomacy improving markets, USD tumbling
The U.S. Dollar is trading in weaker ranges to start the week as risk-appetite resurged as a result of positive news regarding Middle East tensions.
Negotiations between the U.S. and Iran are set to continue after President Donald Trump was reportedly interested in maintaining diplomatic efforts alive. In turn, this eased pressure on oil markets as prices for crude have subsided. Since the Buck is no longer gaining as a safe haven, most major peers in the G-10 seem to be gaining along with some LATAM as well as Emerging-Market currencies.
Overnight in Asian exchanges witnessed an uplift for Chinese stocks following news that financial regulators would be meeting with banks and securities firms to discuss measures that are supportive of the capital market. Domestically, we will be fed plenty of data points throughout the week, starting with October’s Manufacturing Purchasing Managers Index and the Institute of Supply Management survey on manufacturing as well as new orders, employment and prices. End of the week will be capped with Non-Farm Payroll figures, Consumer Sentiment, and the Employment Situation.
What to Watch This Week…
- Euro-zone CPI, Wednesday
- US Nonfarm Payrolls, Friday 8:30AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR
The Euro is experiencing its strongest upward move in over two weeks as the relief across markets from optimism in the current efforts towards a deal with Iran and fundamentals. After a downgrade to France’s credit rating, social unrest there as well as in Germany, and political uncertainty alarming outside observers, the shared currency has been resilient. Additionally, comments from a few European Central Bank members about how markets seem to be underestimating the need to conduct further monetary tightening seemed to boost Euro fortunes. October’s Manufacturing PMIs came in slightly better than anticipated.
MXN
The Mexican Peso has been moving all over the place but has lately caught a break and is up by half a percent thus far this morning. Banxico, the central bank, will be announcing its policy decision on Thursday. After staying put in November, officials are likely to keep interest rates the same following solid Gross Domestic Product numbers that revealed the fastest pace of economic growth for the country since 2023. MXN fell by 2.5% in October so perhaps things can turn around quickly.