Currencies: $ consolidates a few hours before the Biden/Trump debate
The dollar is marking time (-0.25%) following a session which saw the $-Index climb +0.45% to 106.10, testing its best levels since April 30, before falling back to 105.75 on Thursday.
The Dollar had been supported by a sharp rise in yields (up to +10Pts for the ’10-yr’ to 4.33%), which eased a little with a slight decline of -1.5Pt (over 24H) from 4.315% to 4.300%).
The greenback weakened shortly after 2.30 p.m. following the upward revision of Q1 GDP to +1.4% (final).
PCE inflation came in as expected at 3.4% on a “gross” basis and +3.7% on a “core” basis (excluding volatile components).
No surprises on the inflation front, but durable goods orders rebounded by +0.1% (consensus was -0.6%) and weekly unemployment contracted by -6,000 to 233,000.
The dollar retreated on a broad front: by -0.4% against the euro (which rose to 1.0722), by -0.3% against the pound, and by -0.25% against the yen (which the previous day had tested a low of 160.85, a JPY/USD parity not seen since 1986.
The situation could evolve more spectacularly on the FOREX with tomorrow’s publication of the PCE price index – the Fed’s preferred measure of inflation – and above all tonight’s face-off between Joe Biden and Donald Trump in their first live televised debate, scheduled for tonight on CNN.
With less than 5 months to go before the election, the polls are predicting a particularly close election (46% of voting intentions for D.Trump, 45% for J.Biden), and the suspense remains as to whether Joe Biden will be able to demonstrate that he is fully capable of continuing to lead the country for another 4 years.
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