Beyond all the uncertainty associated with the intermittent American tariffs of this year, a central theme that weighs on interest rates and US actions has been the fear of an American consumer in deceleration. Consumption has been the disproportionate engine of the US growth from the pandemic, and concerns are growing about whether consumers are ready to spend less and save more while waiting for clarity about the repercussions we could see from the plans of the new administration both for the economy and for labor perspectives. The consensus awaits a recovery of 0.6% month by month in reading after the 0.9% drop last month. Any missing surprise today probably risks weaker actions, lower interest rates in the US and a weaker US dollar (USD), says Chris Turner, FX Analyst of ING.
Dxy seems more inclined towards 103.20/30 than around 104.00/10
“The big question for investors at this time is how strong Washington will press its reset agenda. The shares have been vulnerable to comments that the administration is prepared to accept a slowdown – or perhaps even a recession – while starting a complete restart in global trade and security areas. Given the perspective of significant tariff risk will continue to be fragile in a perspective of several weeks. “
“Returning to some of this week’s great events, on Wednesday a meeting of the FOMC and a new set of forecasts of the Federal Reserve will be held. No important changes are expected in terms of policy, forecasts or communication rates. However, we see the event as a slight upward risk for the dollar, since the Fed adheres to only two cuts of 25 basic points this year (61 basic points currently prices). In addition, President Jerome Powell has a good History of saying the right things to calm the stock market. “
“The geopolitics will also be in focus, where US president Donald Trump, and Russian President Vladimir Putin, have a phone call scheduled on Tuesday. Any progress here will probably be good additional news for the European FX and bad news for the DXY. Modestas thanks to a Chinese consumption package.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
