Dollar Down as Risk Improves; Earnings Continue to Impress


Dollar Down as Risk Improves; Earnings Continue to Impress

OCTOBER 26, 2021

The U.S. dollar is under slight pressure this morning but well within the ranges, we have seen over the past week and a half.


Global risk sentiment is up today as Asian and European equities tick higher, putting downward pressure on the dollar.  American share futures are also in the green boosted by a continued impressive earnings season.  Bloomberg reports that 81% of S&P 500 members have beat expectations so far.  As a result, the S&P is within striking distance of its all-time highs seen last month.

There are a number of data points out this morning but most of them are not top tier.   Home prices are due out at 9 a.m., followed by New Home sales at 10 a.m.  The conference board’s consumer confidence and the Richmond Fed’s manufacturing index are also both due out later this morning.

Earnings season is likely to continue to dominate trade.  U.S. durable goods and U.S. wholesale inventories will cross the wire tomorrow, followed by GDP on Thursday.

What to Watch Today…

  • New Home Sales at 10 a.m.

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The British pound is up today, with most of its strength coming against the Euro with the pound touching its best level since February of last year against the common currency.  However, GBP/USD is 0.4% stronger than yesterday.  There is not much in the way of economic data to justify the move higher so expect the move to be bound by recent ranges.  In fact, the sterling has begun giving back some of its gains at the time of writing.


Risk-sensitive and commodity-based currencies got a boost overnight as well.  The Australian dollar happens to be both and popped nearly half a percent against the U.S. dollar.  Iron ore prices rose, likely giving the Aussie much of its overnight strength.  Q3 consumer price index for Australia will cross the wires tomorrow.  Economists expect the reading will show inflation pressures actually eased in Australia.