The is not marching higher on war drums or geopolitical tension this week; it is grinding firmer for a more mundane, but no less stubborn, reason: there simply isn’t enough bearish nourishment on the table to justify being short at this week’s opening levels. Traders who had hoped for a cascade of negative U.S. data to feed the US dollar bears are left staring at an empty plate, and that absence itself is a reason for the greenback’s resilience.
One-week G10 funding rates still have the US dollar paying out at 4.14% annualized — hardly an incentive to stay short. (That’s why we play our hand in tighter two-week windows.) Layer on U.S. housing data, with new home sales snapping back to early-2022 levels, and the market is forced to concede that the slowdown story isn’t yet the headline act. Even Fed Funds pricing, which bottomed in mid-September, has crept 5bp higher. It’s a modest move, but enough to show that the “cut 50bp now” camp isn’t running the show.
Today’s menu is and . Jobless claims are expected to correct lower again to around 230k, undoing that spike to 264k (later revealed as fraud in Texas). A steady labor market is not the stuff US dollar bears dine on. Existing home sales may be softer — consensus sits at 3.95 million annualized — frankly, I’m not sure that even matters much after the new home boom.
Meanwhile, eight Fed speakers are queued up like actors taking the stage in a crowded theatre. Stephen Miran will reprise his role as the Uber dove, pressing for quicker and deeper . Yet the market knows his script well; his voice alone is unlikely to shift the US dollar unless the broader chorus of Fed officials joins in.
is hovering near 98, stuck like a ship in still water. Without softer U.S. data to provide wind for the bears, the US dollar remains becalmed, frustrating those positioned for a slide.
On the euro, the recent slip looked more like a domestic data whiff than anything else. The data pricked the balloon of optimism, reminding markets that “fiscal stimulus” often looks more like creative bookkeeping than fresh spending. Europe may eventually find firmer footing, but patience is required. Without ECB headlines today, is at the mercy of U.S. flows. A dip below 1.1725 risks deeper slippage toward 1.1675, though dip buyers remain lurking in the weeds.
The yen, meanwhile, sits uneasily in the market’s crosshairs. It eked out a small bounce after BoJ minutes reiterated a willingness to raise rates someday, but that was old news. More than policy, it is Japanese political kabuki stealing the stage and holding the JPY hostage. So has held its not-so-mysterious bounce, but its technical outlook still looks dim unless the U.S. delivers a series of shockingly good economic news.
For now, the US dollar holds sway not because it has seized power with overwhelming conviction, but because the opposition is too weak and too divided to mount a serious challenge. In markets, sometimes inertia is the most powerful force of all.