US Dollar hovers between fresh year-to-date and one year high after Red Sweep gets confirmed

LONDON (November 14) The US Dollar (USD) sets forth its Trump trade rally for the fifth consecutive trading day with the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, reaching the highest level seen since November 1, 2023, above 107.00. The additional push comes after major news agencies reported on Wednesday evening that the Republicans had secured enough seats for a majority in the House of Representatives after already winning the Senate. Thus, The “Red Sweep” has materialized, and President-elect Donald Trump will face very few issues or struggles to get any package through both political decision bodies. 

The US economic calendar includes the weekly Initial Jobless Claims and the Producer Price Index (PPI) inflation data for October. No big shakeups there after PPI numbers came in a touch higher, roughly in line with US October Consumer Price Index (CPI) economist expectations from Wednesday. Instead, expect some nervousness from Federal Reserve (Fed) Chairman Jerome Powell’s speech after several Fed members questioned this week whether a December rate cut is still valid under current market conditions. 

Daily digest market movers: Is this it?

• Macroeconomic data for this Thursday has been published:
  • Weekly Initial Jobless Claims for the week ending on November 8 came in lower than expected at 217,000 where an uptick to 223,000 was expected. 
  • The Producer Price Index (PPI) data for October came in a touch higher than expected:
    • The monthly headline PPI was in line of expectations at 0.2% against the 0.1% from last month. Core PPI was in line of the survey as well, coming in at 0.3%, from 0.2% previously. 
    • The yearly headline PPI accelerated to 2.4%, surpassing the 2.3% expectation and higher than the 1.9% from last month. Yearly Core PPI jumped to 3.1%, above the 3.0% expectation and higher than the previous 2.9%.
• Three Federal Reserve members and the Fed Chairman itself are set to speak this Thursday:
  • At 12:00 GMT, Federal Reserve Governor Adriana Kugler (2024 FOMC voting member) delivers a speech about central bank independence and economic outlook at the Latin American and Caribbean Economic Association 2024 meeting in Montevideo, Uruguay.
  • Richmond Fed President Tom Barkin discusses the economy with Jodie W. McLean, secretary of the Real Estate Roundtable board of directors at around 14:00 GMT.
  • At 20:00 GMT, Federal Reserve Chair Jerome Powell participates in a panel discussion titled "Global Perspectives" about the economic outlook at an event hosted by the Federal Reserve Bank of Dallas. 
  • New York Fed President John Williams closes off this Thursday by delivering keynote remarks on "Intermediating Impact: Making Missing Markets" at a New York Fed event at 21:15 GMT.
• Equities are having issues to hold on to gains. Europe is able to do so while US futures are marginally turning flat to negative. 
• The CME FedWatch Tool is pricing in another 25 basis points (bps) rate cut by the Fed at the December 18 meeting by 82.5%. A 17.5% chance is for rates to remain unchanged. While the rate-cut scenario is the most probable, traders have pared back some of the rate-cut bets compared with a week ago.
• The US 10-year benchmark rate trades at 4.47%, just off the high printed at opening at 4.48%.

FXStreet