Economic Data and Geopolitics Put the Dollar in the Spotlight

As the trade war turns yet another corner, the focus will return to impeachment chatter and economic data…
Bob Mason
Global financial markets

Earlier in the Day:

It was a particularly quiet day on the economic calendar through the Asian session this morning.

There were no material stats to provide the majors with the direction in the early part of the day.

A lack of stats left the markets to respond to yet another change in trade war rhetoric from both the U.S and China on Wednesday.

U.S President Trump talked up the possibility of a U.S – China trade agreement, which was likely in a bid to deflect focus on the impeachment story. News also hit the wires on Wednesday of China looking to increase pork imports from the U.S.

It remains to be seen, however, whether China’s latest decision comes in a bid to make progress or fill a pork void.

For the Majors

At the time of writing, the Kiwi Dollar was up by 0.06% to $0.6276. At the time of writing, the Japanese Yen was up by 0.12% to ¥107.64 against the U.S Dollar, while the Aussie Dollar up by 0.10% to $0.6757.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Germany’s October GfK Consumer Climate figures are due out ahead of the European open.

With the Eurozone and German economy dependent upon consumer spending, a slide in consumer sentiment would likely weigh on the EUR.

In the later part of the European session, the ECB Economic Bulletin is also due out. We would expect the Bulletin to have a muted impact on the EUR. There’s been plenty of doom and gloom and the ECB just delivered, so there’s unlikely to be too many surprises.

Outside of the numbers, geopolitics will also influence throughout the day.

At the time of writing, the EUR was up by 0.10% to $1.0954.

For the Pound

It’s another quiet day ahead on the data front, with no material stats due out of the UK to provide the Pound with direction.

Brexit and British politics continue to be the key drivers, with Boris Johnson left with just 5-days remaining to deliver an Irish backstop alternative.

At the time of writing, the Pound was up by 0.07% to $1.2362.

Across the Pond

It’s a busy day ahead on the economic calendar. Key stats include 3rd estimate GDP figures for the 2nd quarter, together with August trade data and pending home sales figures. The weekly jobless claims and August retail sales ex-autos are also due out.

Barring deviation from 2nd estimate GDP numbers or a jump in initial jobless claims, the market focus will likely be on the pending home sales, trade, and retail sales numbers.

While optimism over a resolution to the U.S – China trade war lingers, consumer confidence remains key. The housing sector has found strong support from low mortgage rates and a strong labor market. Any unexpected slide in pending home sales could pin back the Dollar.

Any chatter on trade or the Trump impeachment will likely be the key driver through the day, however.

The Dollar Spot Index was down by 0.09% to 98.95 at the time of writing.

For the Loonie

It’s another quiet day ahead on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk sentiment.

The Loonie was up by 0.08% at C$1.3257, against the U.S Dollar, at the time of writing.

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