The dollar managed to partially recover its losses (Daily analysis 13.09.2021)

13 Sep 2021 11:21|Bartosz Sawicki

Corrective reshuffling continues on the currency market: the dollar, both against the euro and against a basket of main currencies, managed to make up half of the US currency's sell-off. In the coming days, markets may switch to waiting for next week's Federal Reserve meeting.

The cool-down of investment sentiment can also be seen on global equity markets. The main stock indexes on Wall Street and other trading floors of the Old Continent have not long ago set all-time highs, but last week was the worst week for this asset class until June. The pretexts for the declines are not new: there is uncertainty about the epidemic situation and concerns about the prospects for the global economy, with particular focus on the economic situation in China.

The dollar may look the other way when the data marathon starts

The US labour market report for August was so disappointing that it strongly undermined the chances of announcing the beginning of the tapering, i.e. gradual phasing out of asset purchases conducted by the Federal Reserve already at next week's meeting. In this scenario, such a step is more likely in November, and the process itself would start in December.

As a result, in other circumstances, the most important data showing the condition of the US economy have less potential to provoke a strong reaction - too much will not depend on them. Their marathon will start tomorrow with consumer inflation (price growth is expected to decelerate slightly but remain above 5% year-on-year). On Wednesday, industrial production will be in focus and a day later: retail sales. The week will end with a reading of consumer sentiment, which has deteriorated sharply recently. In addition, important regional economic barometers will be published in the New York and Philadelphia areas. So there will be plenty of data but no new signals from the monetary policy front - a period of media silence is already underway.

13 Sep 2021 11:21|Bartosz Sawicki

This commentary is not a recommendation within the meaning of Regulation of the Minister of Finance of 19 October 2005. It has been prepared for information purposes only and should not serve as a basis for making any investment decisions. Neither the author nor the publisher can be held liable for investment decisions made on the basis of information contained in this commentary. Copying or duplicating this report without acknowledgement of the source is prohibited.

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