Buck Reaches Best Point in Six Weeks
The U.S. Dollar is trading in stronger ranges with growing concern over the need to once again slow down activity to prevent further escalation of the coronavirus.
Although stock indices around the globe eased off on their deterioration after a major pullback since Monday, the buck broke through a resistance level and kept a four-day winning streak. This is the strongest greenback since August 11th per the Bloomberg Dollar Spot Index. Additionally, there is now evidence of stagnation and decline in business investment according to data released out of the Ancient continent during their trading session.
The death toll of COVID is high and without a vaccine or any guarantees of a release by end of the year, traders and investors expect plenty of volatility, especially with political battles brewing domestically because of election time and elsewhere because of unfinished accords as well as a further dispute. Clearly, there is a scarcity in guidance with a lot of unfinished business and risk events to occur.
It is important to note that Fed Chairman Jerome Powell will have more chances to ask legislators for fiscal help when he meets the House Select Committee on the coronavirus later today. Data-wise we have Purchasing Managers’ Index figures out at 9:45AM.
What to Watch Today…
- Purchasing Managers’ Index figures at 9:45am
- Testimony from Fed Chairman Powell at 10:00am
Complete Economic Calendar can be found here.
The Euro slipped further overnight, falling to its lowest point since July 24th after disappointment on worrisome contractionary PMI data. Indeed, Services PMI came in at a reading of 47.6 when 50.6 was estimated, meaning that the sector experienced a contraction instead of a forecast expansion.
Manufacturing looked better, but that may be due to a return to that sector in bigger numbers as well as expenditures ahead of winter with medical equipment and others leading. The overall PMI for September average 50.1, meaning the bloc will need a resurgence to merit an increase in the value of the Euro as high as we saw weeks ago when it went to a 28-month high.
The Pound remains under major pressure in a week to forget as it seems there will be a regression in the return to normal economic activity and individual mobility. A globe hoping to stay on the path to recovery is seeing more travel restrictions return and U.K. officials are not knocking down the idea of calling for another lockdown. In Britain, the PMI numbers also showed that Services are only dragging along. With uncertainty reigning, expect the buck to stay afloat and a little pullback only if we see headlines that primarily address how to solve the medical issue still at hand.