2024 Presidential Debate: Trump vs. Biden
Last night, President Joe Biden and former President Donald Trump faced off in their first presidential debate for the 2024 election cycle. The debate, hosted by CNN, was held in Atlanta without a live audience, a departure from traditional debate formats. Both candidates adhered to strict rules, including having their microphones muted when it was the other’s turn to speak.
The debate was marked by intense exchanges on a range of issues including the economy, foreign policy, and social issues. Biden emphasized his administration’s achievements and plans for continued economic recovery, while Trump criticized Biden’s handling of the economy and proposed a return to his previous policies.
The debate highlighted the sharp contrasts between the candidates, setting the stage for a contentious election season. Both candidates will face significant scrutiny as the campaign progresses, particularly given their advanced ages and the critical nature of the issues at stake (The Daily Beast) (Honolulu Star-Advertiser).
Recap of Yesterday’s Highlights:
The U.S. GDP Growth Rate for Q1 was published yesterday and revealed a final quarterly growth rate of 1.4%. This was in line with forecasts. However, from the previous quarter (3.4%), there is a large decrease in the GDP Growth Rate, indicating that the economy is slowing down.
Today’s Key Data Points:
The U.K. reported its Q1 GDP Growth Rate, which came in at 0.7%, was above the 0.6% forecast and consensus. That might come on the back of a more-than-expected stronger economic rebound— an economic recovery that might just nudge the Bank of England into thinking about tighter policy in the future faster than they were initially planning for.
Later in the day, The US Core PCE Price Index for May will be released at 1:30 PM today. The focal point of 0.1% lies with the consensus and expectations, foreseeing a muted level of inflation. Such a unified pattern in the latest Core PCE Price Index will bring an impact on the transfer mechanism by the Federal Reserve at the payment of interest rates.
FX Markets Overview
Today’s FX markets reflect a mix of economic data releases and geopolitical developments, resulting in notable volatility across major currency pairs. Here’s a snapshot of the key movements and underlying factors:
US Dollar (USD):
The US Dollar Index (DXY) has risen to 106.058, up by 0.12% in the past 24 hours. This increase is driven by robust US economic data, including strong durable goods orders and lower-than-expected jobless claims (TradingView).
Euro (EUR):
The euro has weakened against the dollar, with EUR/USD trading around 1.0691, down by 0.11% over the last day. Weak economic sentiment from Germany and continued high inflation in the Eurozone are weighing on the euro (TradingView).
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British Pound (GBP):
The pound is trading at approximately 1.2624, reflecting a 0.12% decrease. Despite recent Bank of England comments suggesting possible rate hikes, ongoing economic concerns in the UK are putting pressure on the pound (TradingView).
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Japanese Yen (JPY):
The yen has weakened further, with USD/JPY climbing to 160.978, a 0.14% increase in the past 24 hours. The yen’s depreciation continues as the Bank of Japan maintains its ultra-loose monetary policy, contrasting with the tightening stances of other central banks (TradingView).
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Commodity Currencies:
The Australian dollar (AUD) is seeing gains, trading around 0.6750 against the USD, supported by strong commodity prices and positive domestic economic data. Similarly, the Canadian dollar (CAD) is benefiting from higher oil prices, with USD/CAD trading at 1.3120.
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Other Economic News
US Economic Data:
The US released strong durable goods orders data, showing a 2.5% increase, well above expectations. Initial jobless claims also came in lower than anticipated at 225,000, indicating a still-tight labor market. These figures support the US dollar’s strength (TradingView).
Eurozone Inflation:
The latest inflation data from the Eurozone shows headline inflation at 6.1%, slightly down from the previous month’s 6.4%. Core inflation remains high at 5.4%, suggesting continued inflationary pressures that may prompt further tightening by the European Central Bank (TradingView).
China’s Economic Outlook:
Recent data from China indicates slowing industrial production and retail sales growth, raising concerns about the pace of recovery in the world’s second-largest economy. The Chinese yuan has reacted accordingly, with USD/CNY climbing to 7.2200.
Geopolitical Tensions:
Ongoing geopolitical tensions, particularly between the US and China, continue to add uncertainty to the markets. Recent developments include the US considering additional restrictions on technology exports to China, which could have broader implications for global trade and economic stability.
Commodity Prices:
Oil prices are on the rise, with Brent crude trading around $77 per barrel, supported by supply concerns and ongoing geopolitical risks. Gold prices have dipped slightly, hovering around $1,915 per ounce, as stronger US economic data dampens demand for safe-haven assets.
Summary
Today’s FX market movements underscore the complex interplay of economic data and geopolitical factors. The US dollar remains robust on the back of positive economic indicators, while the euro and yen face pressures from weaker economic sentiment and divergent monetary policies, respectively. Commodity currencies are buoyed by favourable commodity price trends and supportive domestic data.