The U.S. Dollar is starting September on strong footing as the emerging market contagion has equity markets in the red, thus allowing the buck to thrive as a safe-haven.
Additionally, the dollar deserves its appreciation based on better-than-expected economic data that guarantees the Fed will maintain a more hawkish stance than other monetary authorities globally.
Mexican Peso and Canadian Dollar continue to sink against the greenback as criticism and anxiety build over the new NAFTA-like pact. Mexico and the U.S. having agreed to something while keeping Canada off the table is starting to charge its toll as Canadian officials revise and give their imperative input. Autos, appliances, and many other products are at risk of not being in accordance to Canada’s needs, thus undermining progress in revamping trade between the three continental powers.
The Euro is being negatively impacted tremendously by the instability from Turkey to Argentina, affecting all kinds of business and banking activity. For weeks now, the Euro has been exposed to major developments in Turkey, a country in the midst of a diplomatic battle with the U.S. that has resulted in economic sanctions.
In attempting to retaliate, the Turkish have botched it and European assets, especially German ones, are intertwined and at risk of losing from Turkish changes to monetary policy and other decisions. Argentina affects Latin markets, also crucial for Europe. The world in chaos aids the buck and there seems little ahead to turn it around. Volatility is high though and aggressive swings may be coming too.
The Pound is in trouble as it dropped strongly because of ongoing Brexit inefficiency. Michel Barnier, the chief EU negotiator, announced his disagreement with the customs-solution that Prime Minister Theresa May has proposed.
This is the start of what may be havoc in British politics since an October deadline has already been scratched as unrealistic and Conservatives fear no concessions from the EU. Changes are ahead, if not from the very top of government or a new campaign to change the strategy of separating from the EU.