Dollar Mixed on Middle East Diplomacy
The U.S. Dollar is trading in mixed ranges against major peers after officials from Saudi Arabia, Pakistan, and Turkey met in the Iranian capital yesterday for discussions on how to achieve an end to the conflict in the Middle East and Iranian Supreme Leader Mojtaba Khamenei called for an end to the current state of ‘neither war nor peace.’
These factors helped to drive down oil prices and as a result Brent Crude trades under $115 per barrel after reaching nearly $117 earlier in the session. This optimism regarding an end to the conflict directly contrasts with reports that Saudi Aramco’s largest oil export terminal at Ras Tanura was attacked early this morning, although the extent of the damage is not currently understood, and signals from President Trump that strikes in the region could resume following U.S. midterm elections. Traders remain focused on the Federal Reserve’s interest rate decision tomorrow afternoon, but in the meantime, we will receive preliminary Durable Goods Orders figures for the month of September at 8:30am, which are expected to come in at 1.9%, a significant increase from August’s final figure of -0.1%.
What to Watch This Week…
- Federal Reserve Interest Rate Decision - Wednesday, 2pm
- Personal Consumption Expenditures - Thursday, 8:30am
- U.S. Gross Domestic Product - Thursday, 8:30am
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR
The Euro is down against the Dollar this morning, reaching its lowest level in nearly two weeks and on track for a fifth consecutive day of losses. This depreciation follows reports that French consumer confidence has reached a 13-year low in October, further exacerbating existing fiscal and political concerns surrounding Europe’s second largest economy. The European Central Bank’s October lending survey was also released this morning and showed that credit conditions have tightened, and loan demand fell in the third quarter of the year on elevated risk concerns. The ECB is scheduled to meet on Thursday, and they are expected to keep interest rates on hold at 2.5%, in a similar fashion to what is expected from the Federal Reserve, but Traders are expecting this to be a dovish hold from the ECB, and therefore more Euro-negative, given that growth figures in Europe are ‘less robust’ than in the U.S.
GBP
The British Pound is down against the Buck this morning amid uncertainty surrounding the new Chancellor of the Exchequer John Healey’s first budget release tomorrow. All signs point to a ‘steady-as-she-goes’ style budget, but some Analysts are concerned that Traders have become too optimistic about the contents given that we do not fully know what it will contain and there is remaining opportunity for some surprises. Shop Price Inflation accelerated to 2.1% year-over-year in October, the highest level in nearly two and a half years and well above the 1.6% expectation, and the number of distressed businesses hit a twenty year high, adding to concerns about the health of the British economy.