The U.S. Dollar remains stuck in quiet ranges, staying strong against the G-10 even while Pound Sterling tries to mount a recovery.
Markets are eager to see what the G-20 meeting in Argentina, starting Friday, has in store. We expect Britain’s currency to stay in weak ranges and volatile until the December 11th vote in parliament over the Prime Minister’s Brexit deal. Additionally, the Euro fell to levels close to their weakest in sixteen months yesterday afternoon based on faith in the dollar as a safer-haven asset.
Gross Domestic Product figures today came in at 3.5% growth for Q3 as forecast, but Personal Consumption registered below expectations at 3.6% under 3.9%. Core PCE, which the Fed prefers as a measure of inflation on personal consumption, only grew by 1.5% when 1.6% was estimated instead.
This data will likely not derail the Fed from continuing on its interest-rate hike path. We shall get confirmation of that as we hear Jerome Powell, the Fed chairman who will speak at 12PM addressing the Economic Club of New York.
What to Watch Today…
- No major events scheduled for today.
The complete economic calendar can be found here.
The Euro has weakened although there is hope in the horizon. Italian leaders spoke of coming around on making adjustments that could make their spending budget proposals more acceptable to the European Union financial officials they are in negotiations with. While the European Central Bank is expected to end quantitative easing as a whole next month, some traders wonder if the shared currency will jump higher rather quickly when speculation starts over the chances of increasing interest rates.
The Pound is under pressure and will stay that way until mid-December. Today, we will have Bank of England Governor Mark Carney speak at 11:45AM in a discussion over the effects of Brexit on financial stability.
The lively topic shall attract some ear time, thus it is important to recall that during the last meeting announcement, Carney surprised many with his positive tone about future growth and faith that if Brexit deal issues came to an end, all else would continue to steady and eventually rise appropriately. Pound responded with a surge that was cut short by other developments. Upgraded or downgraded economic outlooks at this point may not do much, but if he sounds overtly cautious or worried, Sterling could go even lower.