U.S. Dollar finds weakness as data looks dire

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U.S. Dollar finds weakness as data looks dire

OCTOBER 02, 2019

The U.S. Dollar lost ground yesterday morning after very poor manufacturing data crossed the wire. The ISM factory index fell to its lowest level since June 2009.

Overview

The manufacturing sector has been in a recession all year long but the weak data yesterday renewed fears of an overall recession, sending stocks lower.

The dollar has since rebounded for yesterday morning’s losses and is still trading in favorable ranges against most of its rivals.   Although this morning’s economic docket is not doing the greenback any favors.  ADP private jobs data showed that employers only added 135K jobs in September, missing estimates. More importantly, last month’s impressive print was downwardly revised.

There is no other major economic data on today’s slate, but there are several Fed speakers this morning that can move markets. We will pay extra attention to comments from the New York Fed’s John William’s speech today in San Diego.

What to Watch Today…

  • No major events scheduled for today.

Complete Economic Calendar can be found here.

CHF

The Swiss franc fell over a half a percent overnight on chatter that the Swiss National Bank will cut rates even more negative toward the end of the year.  Inflation last month came in at the lowest level in three years, which would allow the SNB to ease policy further.

Equity markets across the globe are awash in red this morning, but the traditional safe-haven currency was unable to take advantage due to the prospect of new easing measures.

GBP

The British pound has seen an uptick in volatility even GBP/USD opens this morning in familiar ranges from yesterday.  Relatively new Prime Minister Boris Johnson is set to deliver an address to his party’s annual conference.  He will present the details of what he will propose to the EU.

However, the details of his proposal were leaked yesterday and received a cold reception from Ireland.  The clock is ticking and Johnson has just 9 more days to strike a deal or he will likely have to ask the European Union for another extension to Brexit, which would cause great political risk to his premiership. 

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