Entering December, the buck comes in relatively down after surging for months to multi-month as well as multi-year highs against a basket of currencies. Now that we enter the last run of data and speeches, policy expectations become the focus.
On the Fed side, it seems like there is no reason to doubt an interest rate hike on December 19th when they meet. On the trade side, it seems like the U.S. and China may honor what appears to be a cease-fire for the next three months in which they have agreed not to do damage to each other with further tariffs. Equity and commodity markets are also making a comeback on developments between OPEC and Russia to move towards production cuts, naturally a boost to oil prices and downer for the greenback.
What to Watch Today…
- • ISM Mnfg. 10AM
• Construction Spending 10AM
The Euro became vulnerable and reactionary to political headwinds and the weekend gave more evidence for concerns. Spain has dealt with separatism and terrorists attacks in recent years, which have shaken the population’s faith in the center-left coalitions. A far-right political party, Vox, won its first ever seat in a regional government. Already, Spain as well as Italy have made headlines regarding desiring more flexibility to their budgets and fiscal sovereignty over meeting EU standards.
The “Loonie” is up by over one percent along with the Mexican Peso as oil prices surged over G-20 news about Saudi Arabia and Russia agreeing to manage the market to ease price pressures. Additionally, Alberta, Canada’s largest province in oil production, is determined to curtail barrel production by 8.7% to combat the oil supply glut. The buck will continue stronger if economic figures remain solid, but these positive marks are on the side of counterparts.