Slightly Weaker Dollar Forex Market Ahead of Key Speeches

• Dollar Weakness Favors Euro & Pound
• Focus on Figures and Fed/ECB Speeches  
• Stocks Quiet Ahead of Inflation Data

The US Dollar forex market sold off slightly to open the week. This has presented some opportunity for other major forex currencies including the Pound and Euro both of which have been struggling lately. They will be looking to continue making up ground on a Dollar that is selling off more. Important data from the US could have an impact on markets today while key speeches from both the Fed and ECB make up the backbone of the day. PPI numbers are expected to move the dial on Wall Street too as many traders refocus on the question of inflationary pressure. 

Sterling and Euro Look to Gain Ground

The recent period has been a challenging one for both the Euro and Pound. They have both labored under a pandemic-era strong US Dollar of late. There now appears to be a window of opportunity for both to push back against a USD that is experiencing some selling pressure in a more positive market environment this week. 

A bumper earnings season combined with a continuing recovery in the numbers from COVID-19 have propelled more people both back into the workplace, and planning travels as vaccination numbers continue to trend up, and more treatments become available.  The Euro has rebounded well to trade above 1.16 with the German Economic Sentiment Indicator to be released today, while Sterling has also felt positivity though this could be curtailed for those forex trading the Pound as the UK continues to wrangle with the EU on key Brexit issues.

Inflation Data and Central Bank Speeches to Come

With the tone set positively, all attentions will turn to the US for Producer Price Index figures for October. These can help give an indication on how inflation is impacting the US economy with this question still a key talking point as the Fed continues to remain supportive particularly on interest rates moving forward. That has not stopped key Fed Presidents from expecting policy hikes in 2022. 

As always, forex brokers and others will have a close eye on Fed Chair Jerome Powell who speaks later today for any indications of a change from the current policy. This comes as it is reported President Biden has interviewed Lael Brainard to be the next Chair of the Federal Reserve.

Wall Street Cautious Ahead of PPI

It has been a largely quiet start to the week on Wall Street as what has been an impressive earnings season draws to a close. There are still some big names to report, though after yesterday’s positive moves from infrastructure as the Infrastructure Bill was passed on Friday, early trading today has been quieter.  

Those in the market will be waiting to digest the impact of the PPI numbers as they relate to the lingering inflation question. This is also likely to follow through to Wednesday when the latest CPI numbers are released.