Dollar steadily upward, Oil prices climb
The U.S. Dollar is trading within favorable ranges as investors retreat from both equities and Treasuries while oil prices continue to climb.
Recent damage to energy facilities and ongoing attacks on tankers in the Red Sea and the Strait of Hormuz have heightened concerns about access to energy supplies and made the global outlook more pessimistic. Additionally, investors and traders are concerned that there will be no reprieve from the violence or the blockade, both of which have escalated in recent weeks. Despite solid earnings reports from technology companies and microchip makers such as Taiwan Semiconductor Manufacturing Co., futures dropped, and other exchanges are deep in negative territory.
Domestically, comments from Fed Governor Chris Waller seemed somewhat “hawkish.” He told reporters at the Istanbul Economic Forum that, if economic data continue to meet expectations, he foresees the need for further interest rate hikes to combat inflationary pressures. Tomorrow, we will receive the results of the October University of Michigan Consumer Sentiment Survey, a gauge that has weakened recently and is expected to come in below the prior reading. Thus far this week, the Buck has gained approximately half a percent overall, according to the Bloomberg Dollar Spot Index.
What to Watch This Week…
- University of Michigan Consumer Sentiment, Friday, 10AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR
The Euro is hovering near a 17-month low against the U.S. Dollar as major sectors feel the effects of growing uncertainty in France and the resulting political turbulence across the eurozone. Although it had been the region’s top performer over the past year, the Stoxx 600 Bank Index dropped 2.2%, marking its worst two-day run since March. French assets are suffering, with a selloff in sovereign debt leaving more than a third of the country’s corporate bonds trading as though they were safer than government-issued bonds. Unless the unrest ends, the shared currency is likely to post further losses during the remainder of the week.
MXN
The Mexican Peso recovered some ground yesterday but is currently slightly down against the Buck following the release of inflation data. September Consumer Price Index figures showed a faster monthly pace of 0.42%, compared with 0.2% in the prior month, but fell short of some estimates. At 11 a.m., we will receive the minutes from the central bank, Banxico, offering insight into officials’ thinking as inflation continues to rise.