Daily Market Update

Dollar Holds Gains; Peso Plummets

October 29, 2018

The greenback looks to build on last week’s momentum.

Overview

The greenback rallied last week amidst global panic in equity markets and touched yearly highs against a handful of its rivals. The dollar is firm this morning, boosted by events abroad.

The Mexican peso was the biggest loser overnight, falling nearly 2.0% at its low. The peso touched its weakest level since July after Mexicans voted to scrap plans for building a $13 billion dollar airport. The airport is reportedly already 1/3rd completed.

The domestic economic docket should not get in the dollar’s way. Personal income disappointed in September, only rising 0.2% from a forecasted 0.4%. However, August’s print was upwardly revised. Personal spending was right in line with projections at 0.4%. A separate report showed that the Fed’s preferred gauge for inflation was in line with the central bank’s target. PCE Deflator showed inflation at 2.0% year over year.

 

What to Watch Today…

  • U.K. Budget at 11:30AM ET

The complete economic calendar can be found here.

 

EUR

The Euro remains near its recent lows against the U.S. dollar. The common currency saw increased volatility overnight on headlines out of Germany. The Euro initially fell on reports that German Chancellor Angela Merkel would not seek reelection to head her Christian Democratic party. However, the Euro recovered modestly on a second report that suggests that Merkel will stay on as the nation’s chancellor.

Tomorrow, Germany will release its preliminary CPI and the Eurozone will publish its Flash GDP

GBP

The sterling held familiar, weak ranges against the U.S. dollar overnight after reaching a monthly low last week. At 11:30 a.m. Eastern, UK Chancellor of the Exchequer Phillip Hammond will release his budget to parliament. Hammond recently said during an interview that a separate budget and plan would be needed if the U.K. exits the EU without a Brexit deal.

Tempus’ Senior FX Strategist Juan Perez was on Bloomberg Radio in the U.K. overnight previewing the budget release.

 

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