Daily Market Update

Dollar Shakes Off Turkey Hangover; Euro sinks on PMI

November 23, 2018

U.S. markets were closed yesterday for Turkey Day but the greenback has shrugged off any tryptophan-induced hangover and is gaining against most of its rivals this morning.

Overview

With little in the way of domestic news, the greenback is benefiting from weak data released abroad.

Today is “Black Friday” and early estimates from Deloitte show that American retailers are off to a strong start. Consumer consumption is about 70% of the U.S. economy so a strong holiday season would bode well for the economy’s momentum into 2019.

Next week’s meeting between President Trump and Chinese Premier Xi Jinping at the G20 summit in Argentina is the largest risk event on horizon. If the meeting fails to produce a deal, the U.S. tariff rate on about 200 billion dollars worth of imports from China will rise, putting extra pressure on U.S. consumers. China has promised to respond.

 

What to Watch Today…

  • Markit PMIs at 9:45 Eastern

The complete economic calendar can be found here.

 

EUR

The common currency is under pressure this morning after a report showed that the composite purchasing managers dropped to the lowest level in four years. The 52.4 reading in November missed estimates of 53.0 and was down from 53.1 last month. Germany’s PMI, Europe’s largest economy, also badly missed estimates. The Euro is headed for its fifth weekly decline in six weeks.

AUD

The Australian and New Zealand dollars are at the mercy of the G20 meeting between the U.S. and China. China’s is Australia’s largest trading partner so anything that could slow down the world’s second largest economy will also dent Australia’s prospects. The AUD has fallen over 1.5% this week on concern that there will not be a resolution to the trade war anytime soon.

 

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