The United States Dollar appreciated again across the board in overnight trading, as risk off environment continued to dominate market sentiment. The US Dollar Index futures are up hitting 96.62 overnight and increased around 0.13 per cent.
Many sources drove momentum, chief among them was the equity market. The S&P500 is on track for its 13th negative day out of 15 and is 8% lower than its late-September high. The catalysts for the falls are numerous and varied. However, the general sentiment is that there will be tighter future global growth. US-China tensions and softer earnings reports aren’t helping either. The falls in equity markets spearheading a general flight to safety across financial markets with the Greenback being a prime beneficiary of the shift in asset allocations.
US growth differentials vs other G20 countries remain high, and the Fed is deliberating the merits of hiking beyond the neutral rate into restrictive territory, which apparently is not priced.
Moving into Friday, the economic calendar still interesting with USD Gross Domestic Product Annualized (QoQ) (3Q A) at 3.5% vs consensus of 3.3%, USD Gross Domestic Product Price Index (3Q A) at 1.7% vs 2.1%. USD Personal Consumption (3Q A) at 4.0% vs 3.3%. Later this morning we will have Pending Home Sales. FOMC Member speeches today come from Clarida and Mester are 12:15 pm and 5:30 pm EST respectively.