U.S. Dollar steadying as ECB talks stimulus
SEPTEMBER 09, 2021
The U.S. Dollar is trading in weaker ranges this morning as markets are trying to regain some positivity about the immediate future as we hear out plans by the European Central Bank to start slowing down their emergency pandemic bond-buying program.
At the time of writing, the ECB’s President Christine Lagarde explained in her press conference that the rebound phase in the recovery increasingly advanced. Meanwhile, U.S. Initial Jobless, as well as Continuing Claims, came in close to expectations. There will be more data to digest tomorrow in the form of the Producers Price Index ahead of next week’s other inflation gauges.
Equity markets are also weighing the potential for further intervention from the Chinese government in tech companies. The sudden summoning of gaming companies to discuss further oversight has certainly shaken the faith of many in the ability for free markets to be allowed in all kinds of trading. Anything that further creates havoc in an already fragile environment could end up benefitting the dollar as it looks to erase August losses and get back to gains.
What to Watch Today…
- No major economic events scheduled for today
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The Euro is currently flat, slightly lower than it traded during the European session as ECB Chairwoman Christine Lagarde explains the current thinking. Indeed, the ECB will start moderately reducing the pace at which bonds are purchased, but the QE will still be there. While the central bank leader stated that significant progress has been made, the ECB will only be recalibrating its stimulus. Since this is mild and kind of expected, it would be a surprise if the Euro gained much in value from this remainder of the week.
The “Loonie” did not move much based on the Bank of Canada meeting, as we expected, but be warned that the currency could move a bit as we get closer to federal elections for September 20th. The mood in Canada is split between those that believe the ship can be steered by a once more popular Trudeau and others that believe the country needs change. It has not been this exciting for our northern neighbor in a while so watch out for surprises as the current Prime Minister tries to sell himself as a go-to leader with more resolute opposition than ever before.