Dollar Slumps On Worries Of What Clearing US Data Fog Might Show

Summary:

The dollar struggled to claw back steep losses on Friday and was on track for a weekly fall, as investors awaited a backlog of U.S. data following the government's reopening, which they expect will likely point to a weakening economy.

The overnight move lower in the dollar came alongside a selloff in U.S. equities and bonds eerily reminiscent of the market turmoil in April, as investors pared back bets of a Federal Reserve rate cut in December.

"There's a whiff of 'sell America' back in the air," said Ray Attrill, head of FX research at National Australia Bank.

However, expectations of a more hawkish Fed failed to lift the dollar, which fell to a two-week low against the euroovernight. The common currency bounced back above the $1.16 mark and last bought $1.1630.

The Swiss francsimilarly held near an over three-week high and steadied at 0.7933 per dollar. Against a basket of currencies, the greenback languished near a two-week low at 99.27.

The dollar index was headed for a weekly fall of 0.3%

"Starting from next week, we're going to get a lot of economic data from the U.S., and we think it's going to be pretty bad. I think that the market is now preparing for the coming deluge of poor U.S. economic data," said Joseph Capurso, Commonwealth Bank of Australia's head of foreign exchange, international and geoeconomics.

While that would normally fuel expectations of more aggressive Fed easing to shore up a weakening economy, Capurso said the impending patchy data releases may explain why Fed funds futures have moved the other way.

The White House indicated that the U.S. unemployment rate for October may never be available, since it is dependent on a household survey that was not conducted during the shutdown.

"When you're in the fog, you drive slower... when you don't know what's going on in the economy, maybe you slow down your cuts," said Capurso.

While investors see less than a 50% chance of a 25-basis-point cut in December, the odds for such a move in January are almost fully priced. Rate expectations for 2026 have also hardly moved. (0#USDIRPR)

In other currencies, sterlingfell 0.3% to $1.3152, failing to sustain its 0.45% overnight gain against a weaker dollar.

The move lower in the pound came after a report by the Financial Times that British Prime Minister Keir Starmer and Finance Minister Rachel Reeves have abandoned plans to raise income tax rates, marking a sharp shift just weeks ahead of the November 26 budget.

"A weakening of fiscal resolve on the back of political uncertainty is not good news for the GBP," said Sim Moh Siong, a currency strategist at Bank of Singapore.

The battered yenfound some reprieve on Friday thanks to the pullback in the dollar, though remained pinned near a nine-month low hit earlier this week. It last stood at 154.58 per dollar.

The Japanese currency was on track for a fall of nearly 0.8% for the week

Down Under, the Australian dollarfell 0.02% to $0.6529, having slid overnight owing to the broad risk-off sentiment.

The New Zealand dollarlast bought $0.5654, having similarly lost 0.25% in the previous session.

Source: TradingView

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Winkelmann

Political

Economic

More than 900,000 displaced civilians are at risk of flooding in southern Gaza as a severe weather system approaches, amid worsening humanitarian conditions and widespread destruction from Israel's two-year war, municipal authorities warned Thursday.

According to Anadolu Ajansi (AA), the approaching storm "is dangerous and threatens to flood thousands of tents along the coastline and damage large areas inside the city,"

Saeb Lakkan, a spokesman for Khan Younis Municipality, told Anadolu, citing collapsed sewage networks and rainwater retention ponds filled to levels that pose a threat to residents.

The Palestinian Meteorological Department has warned of possible flash floods on Friday and Saturday in valleys and low-lying areas.

Lakkan said municipal authorities are facing an "unprecedented and catastrophic" situation, with more than 900,000 displaced people living in severe hardship as destruction exceeds 85 per cent of road, water, and sewage networks. He said the city cannot handle nearly 15 million tonnes of rubble left by Israeli airstrikes.

"Israeli attacks destroyed roughly 210,000 metres of roads, 300,000 metres of water pipelines and 120,000 metres of sewage lines, leaving the city almost completely paralysed," he added.

He cautioned that sewage stations may shut down entirely due to fuel shortages, which could lead to large-scale sewage overflow and flood entire neighbourhoods.

The spokesman said since the ceasefire took effect on Oct 10, municipal authorities have received only 16,000 litres of diesel, enough to operate for just three days, while municipal crews work with rudimentary equipment to build earthen barriers and redirect valley pathways to protect tents and low-lying areas.

Since the ceasefire took effect, Israel has violated the agreement daily, resulting in hundreds of Palestinian casualties and limiting the entry of food and medical supplies, according to Gaza officials.

Lakkan said 1,900 of the city's 2,200 rainwater drains were completely destroyed, though an emergency project supported by a UN-affiliated organisation is cleaning the remaining drainage channels.

He said the municipality urgently needs mobile pumps and additional emergency equipment to prevent the city from flooding during the expected storm.

The Palestinian official described conditions in Khan Younis as "extremely bleak," saying the city needs immediate international support to remove rubble and restore essential services.

He urged the international community to "act immediately to save two million displaced people facing the risk of flooding and death along Gaza's coastline."

Source: TradingView

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Justin

Forex

Economic

Malaysia's economic growth may have accelerated in the third quarter powered largely by robust consumer spending, according to a survey of economists.

Gross domestic product (GDP) likely expanded 5.2% in the third quarter from a year earlier, according to the median estimate in a poll of 18 economists by Bloomberg. The print would be much higher than the 4.4% year-on-year growth recorded in the second quarter.

A firm labour market, aided by cash handout programmes, boosted household spending while a surge in tourist arrivals lifted retail activity, said Bank Islam. Together, they point to strong private consumption growth in the third quarter, the research house said.

The Department of Statistics Malaysia is due to announce the second, comprehensive estimate for GDP on Friday. Official advance estimates released last month pointed to the economy growing 5.2% year-on-year.

Bank Negara Malaysia has kept the benchmark interest rate unchanged at its final monetary policy review for the year ahead of the data release, drawing comfort from positive macroeconomic indicators.

A sharp pick-up in net exports, which meant that exports grew faster than imports, also shored up the economy during the third quarter.

"While net exports contribute a relatively small portion to the overall economy, the rebound provides an encouraging signal for Malaysia's broader economic outlook," said TA Securities.

The remaining months of 2025, however, could see some moderation as the rush in orders to beat US tariffs fade and trade tensions ease, MBSB Research said.

"Nevertheless, we remain cautious that renewed trade and geopolitical tensions would destabilise and disrupt global trade and supply chain activities," the house flagged.

Malaysia's economy is expected to expand 4.0%-4.8% this year, according to official forecasts.

Source: Theedgemarkets

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Samantha Luan

Political

Economic

Brazil hopes to reach a preliminary trade deal with the US as soon as this month, the South American nation's top diplomat said, as relations between the two countries improve after a months-long feud.

A final Brazil-US trade agreement would come later, according to Brazilian Foreign Minister Mauro Vieira, who made the announcement following his Thursday meeting with his US counterpart Marco Rubio in Washington.

Vieira told reporters that Rubio reaffirmed a prior proposal stemming from technical talks for a "provisional deal by the end of this month or early next month." After that, a final deal would be achieved two or three months later that would "definitively" solve all outstanding issues between both countries, he said.

A brief readout from US State Department spokesperson Tommy Pigott confirmed that the two diplomats "discussed a reciprocal framework for the US-Brazil trade relationship."

Since July, Brazilian exports to the US have faced the prospect of 50% tariffs after US President Donald Trump announced the duties, beyond his 10% across-the-board tariffs, though some key products were exempted beginning the following month.

The US leader's move was part of an ultimately unsuccessful push to stop the trial of Brazil's former President Jair Bolsonaro on charges he attempted a coup after his narrow 2022 reelection loss.

High-level talks between the two largest countries of the Americas restarted shortly after Trump and Brazilian President Luiz Inacio Lula da Silva, known as Lula, briefly crossed paths in September at the United Nations.

The pair met last month in Malaysia, where Lula asked Trump to remove the tariffs as well as sanctions the US government had slapped on Brazilian officials. Lula said afterwards he expected a "definitive solution" with the US soon.

Vieira noted that Brazil's government sent a trade proposal to US officials last week in response to requests from Washington, and that it's expecting a response as soon as Friday. He added that he didn't discuss the proposal's details with Rubio but only broad issues, nor did he provide details on what was included in the Brazilian proposal.

Trump and his Treasury Secretary Scott Bessent have hinted at lower tariffs on coffee this week, which wasn't originally included in the long list of Brazilian exports the US previously exempted from its tariffs.

Brazil is the world's top coffee exporter, but Vieira said he didn't discuss the key commodity with Rubio.

Source: Bloomberg Europe

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Justin

Forex

Political

Economic

Bank of Americaand Bank of New York Mellonasked a federal judge on Thursday to dismiss lawsuits accusing them of knowingly aiding Jeffrey Epstein's sex trafficking by providing banking services to the disgraced late financier.

The proposed class actions filed on October 15 by one of Epstein's victims, a Florida woman known as Jane Doe, said the banks knowingly ignored a "plethora" of information about Epstein's crimes because they valued profit over protecting victims.

Both lawsuits said the banks should have filed suspicious activity reports with the U.S. Treasury Department, which could have helped law enforcement stop Epstein sooner.

But in a filing in Manhattan federal court, Bank of America said Doe alleged merely that it provided routine services to people who at the time had no known links to Epstein, and any suggestion it was more deeply involved was "threadbare and meritless."

BNY Mellon, meanwhile, in a separate filing called Doe's allegations "razor-thin," and included no claims that Epstein was ever a customer or dealt with anyone in particular.

The banks also said it was not reasonably foreseeable their activities would cause harm to Doe, dooming her negligence claims.

Doe's lawyers, including David Boies, did not immediately respond to requests for comment after market hours.

The lawyers have also sued other alleged enablers of Epstein's sex trafficking, and in 2023 reached settlements of $290 million with JPMorgan Chaseand $75 million with Deutsche Bankon behalf of his accusers.

Neither bank admitted wrongdoing in agreeing to settle.

Both settlements were approved by U.S. District Judge Jed Rakoff, who oversees the Bank of America and BNY Mellon cases.

Epstein committed suicide in August 2019 in a Manhattan jail cell while awaiting trial on sex trafficking charges.

His case remains headline material, including this week when House Democrats released emails they said raised new questions about how much U.S. President Donald Trump knew about Epstein's sex trafficking of girls and young women.

Trump has vehemently and consistently denied knowing about Epstein's sex trafficking.

Source: TradingView

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James Whitman

Economic

The US and Argentina reached a deal to deepen "bilateral trade and investment cooperation," the White House said Thursday in a notice briefly posted to its government website.

The accord is a boost to the South American country led by President Javier Milei, an ideological ally of Donald Trump.

"The countries will open their markets to each other on key products," according to the White House statement that said Argentina would provide "preferential markets access for US goods exports" including certain medicines, chemicals, machinery, information technology products, medical devices.

"The United States and Argentina will work expeditiously to finalize the text of the Agreement for signature and undertake their respective domestic formalities in advance of the Agreement entering into force," the statement added.

The deal is part of a much bigger gamble from Trump on Argentina, after the US rushed to provide $20 billion in financing and directly purchased pesos last month in a bid to help stem a currency selloff and help Milei's party ahead of Oct. 26 midterm elections.

It also marks a political victory for Milei, who has positioned himself as one of Trump's closest allies on the world stage.

The US will also remove "reciprocal tariffs on certain unavailable natural resources and non-patented articles for use in pharmaceutical applications," according to the White House.

The White House also said the "countries have committed to improved, reciprocal, bilateral market access conditions for trade in beef."

The moves to ease trade in cattle come as the Trump administration is looking to provide relief to American consumers with wholesale beef prices surging in recent years after US herds dwindled to their lowest level in decades and on the heels of elections in which Republicans suffered losses with an electorate increasingly focused on affordability.

The US on Thursday also announced frameworks for trade deals with El Salvador and Ecuador.

Source: Bloomberg

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Manuel

Political

Economic

The Trump administration said Thursday that it had reached trade frameworks with Argentina, Ecuador, El Salvador and Guatemala.

The frameworks are about increasing the ability of U.S. firms to sell industrial and agricultural products in these countries, according to a senior administration official who insisted on anonymity as a condition for briefing reporters on a call about the agreements.

The White House also released statements on the frameworks, which have yet to be finalized and are expected to be signed within roughly two weeks. It's all part of a broader effort by President Donald Trump to rewrite the rules of global commerce through the use of broad tariffs.

President Javier Milei of Argentina hailed his country’s first bilateral trade framework with the U.S. in nearly a decade as “tremendous news.”

“As you can see, we are strongly committed to making Argentina great again,” he said.

The frameworks touch on an array of subjects, including efforts to reduce nontariff barriers and cut tariffs to 0% on American-made goods as well as commitments to not impose digital services taxes on U.S. companies. There would also be tariff relief on select products from these countries. For example, import licenses in these countries would be eliminated and streamlined, while nations would agree to resolve issues on intellectual property rights.

Under the tariffs previously announced at the end of July by Trump, goods imported from Argentina, El Salvador and Guatemala are taxed at 10%, as the U.S. runs a trade surplus with each of those countries. Products from Ecuador, with which America runs a trade deficit, are taxed at 15%.

Guatemala President Bernardo Arévalo called the framework “good news” and said his country would be in a position to attract new investments.

He said that 70% of the products Guatemala exports to the U.S. will face zero tariffs under the framework, as exclusions are granted for goods the U.S. is unable to make. All other goods would still be subject to the 10% tariff.

The U.S. senior administration official said that tariffs in these nations could be reduced on coffee, cocoa and bananas.

Treasury Secretary Scott Bessent and Trump have each suggested that the tariffs are being relaxed as affordability issues are a key concern for U.S. voters.