Volatility in the Greenback was relatively light this week as forex traders awaited news of any potential U.S. fiscal stimulus coming, and on a lack of any major catalysts from around the globe.
Overall, the U.S. dollar was a net loser on the week, likely on the continued theme of large monetary policy stimulus remaining and a slight positive lean in risk sentiment as COVID-19 vaccine approvals fuel recovery speculation.
United States Headlines and Economic data
U.S. Consumer credit growth slows as credit card balance shrink – “Total credit increased $7.2 billion from the prior month after a downwardly revised $15 billion September gain, Federal Reserve figures showed Monday.”
Pfizer tells U.S. officials it cannot supply substantial additional vaccine until late June or July – “…the U.S. government may not be able to ramp up as rapidly as it had expected from the 100 million doses of the Pfizer vaccine that it purchased earlier this year, raising questions about whether it can keep to its aggressive schedule to vaccinate most Americans by late spring or early summer.”
November 2020 NFIB Small Business Optimism Index: Small Business Owners Remain Uncertain After Election – “The NFIB Small Business Optimism Index declined 2.6 points in November to 101.4 but remain well above the 47-year historical average reading of 98. Six of the 10 Index components declined and four increased. The NFIB Uncertainty Index decreased 8 points to 90, still a historically high reading. Owners expecting better business conditions over the next 6 months declined 19 points to a net 8%.”
Mnuchin Pitches $916 billion relief plan including state aid – “Pelosi and Senate Democratic leader Chuck Schumer called it progress, but said it shouldn’t be used to obstruct the bipartisan negotiations already underway on a proposal from a group of Democratic and Republican lawmakers.”
U.S. third-quarter productivity pared; unit labor costs revised up – “The Labor Department said on Tuesday nonfarm productivity, which measures hourly output per worker, increased at a 4.6% annualized rate last quarter. The slight downward revision from the 4.9% pace estimated last month followed a 10.6% rate of growth in the second quarter, which was the fastest since the first quarter of 1971.”
Mortgage applications to refinance rose 2% last week from the previous week and were an eye-popping 89% higher than a year ago.
Mortgage applications to purchase a home fell 5% for the week but were a strong 22% higher annually.
U.S. wholesale inventories were up 1.1% to $649B – “October 2020 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading day differences but not for price changes, were $496.6 billion, up 1.8 percent (±0.4 percent) from the revised September level and were up 0.9 percent (±0.7 percent) from the revised October 2019 level”
U.S. job openings rise moderately; layoffs increase – “Job openings, a measure of labor demand, increased to 6.65 million on the last day of October from 6.49 million the prior month, the Labor Department said on Wednesday in its monthly Job Openings and Labor Turnover Survey, or JOLTS. Vacancies are below their 7 million level in February.”
Weekly jobless claims increased by 853,000 last week vs. the Dow Jones estimate of 730,000. – “Continuing claims increased by 230,000 to 5.76 million, the first time that number has gone up since late August.”
U.S. Inflation Measure Rose by More Than Forecast in November – “The consumer price index rose 0.2% from the prior month after no change in October, Labor Department data showed Thursday. Compared with a year earlier, the gauge rose 1.2%. The core index, which excludes volatile food and energy costs, also advanced 0.2% from the prior month and increased 1.6% from a year earlier.”
U.S. producer prices increase modestly in November – “The producer price index for final demand edged up 0.1% last month after increasing 0.3% in October, the Labor Department said. That was the smallest gain since April.”
“The law keeps the government running through Dec. 18th.”
“The law funds the government through Dec. 18. Congressional leaders hope to pass both a full-year appropriations package and pandemic aid before then. They have struggled to reach agreement on both fronts.”
“If lawmakers cannot pass relief legislation in the coming days, about 12 million people will lose unemployment benefits on the day after Christmas. An eviction moratorium and family leave provisions put in place earlier this year will also expire at the end of December.”