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Market Briefing: Markets Tiptoe Into October

With traders and investors suffering from a kind of post-traumatic stress syndrome after a brutal September, markets are cautiously edging higher this morning. North American equity indices are pointing to a stronger open, commodity benchmarks are finding their feet, and economically-sensitive currencies like the Canadian dollar are climbing back from Friday’s selloff. The dollar is slightly softer, but remains strong after the Federal Reserve’s favoured inflation measure showed no evidence of deceleration. According to data released on Friday, the core personal consumption expenditures deflator climbed 0.6 percent in August, suggesting that underlying price pressures continue to grow even as gasoline...

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Market Wire: US Inflation Pressures Strengthen, Supporting Fed’s Hawkish Stance

American households kept spending last month and the Federal Reserve’s preferred inflation measure climbed by more than expected, lifting odds on more aggressive tightening from the world’s most powerful central bank. Data released by the Bureau of Economic Analysis this morning showed inflation-adjusted household outlays climbing 0.1 percent in August. A -0.489-percent drop in spending on goods was offset by a 0.849-percent increase on the services side, suggesting that falling gas prices are helping boost spending in other areas of the economy. In unadjusted terms, personal income rose 0.3 percent month-over-month, led by another solid 0.3 percent increase in private-sector...

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Market Briefing: Dollar Remains Strong Amid Quarter-End Rebalancing

The dollar is holding steady and Treasury yields are moving sideways as month- and quarter-end flows dominate price action in the foreign exchange markets. After an extraordinarily-tumultuous September, traders are betting the greenback’s safe haven attributes will remain in demand through early October, with other areas of the global economy suffering the repercussions of a rapid ramp in interest rates. The pound is trading above levels that prevailed before chancellor Kwasi Kwarteng unveiled his government’s tax and spending plans a week ago. The currency rallied this morning as the Bank of England bought long-term gilts and investors bet the government...

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Market Briefing: Markets Stabilize After Yesterday’s Whiplash-Inducing Session

Markets are calming, but remain distinctly depressed after yesterday’s extraordinarily-turbulent session. Ten-year British gilts were yielding more than 4.5 percent and their US equivalents were paying 4 percent before the Bank of England stepped in to “carry out temporary purchases” of long-term bonds, sending rates tumbling back to 4.2 and 3.7 percent, respectively. Trading in the pound remains highly volatile, with the cable interbank rate approaching 1.09 before tumbling this morning when Prime Minister Liz Truss doubled down on her government’s policies in a series of remarkably ill-informed interviews with local BBC radio stations. Asked if she would consider reversing...

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Market Briefing: Depressed Earnings Weigh on Global Market Sentiment, Boosting Dollar

US equity futures are falling and the dollar is climbing after weak earnings releases from the likes of Amazon and Apple provided more evidence of a slowdown in the world’s largest economy. The ten-year Treasury yield is flirting with the 4-percent threshold once again, commodities are weaker, and oil price gains are stalling out. Canada’s dollar is struggling to push through the 1.35 mark. The euro is trading back below parity against the dollar after the European Central Bank delivered a widely-expected 75 basis point hike but removed statement language that had previously suggested rates would ratchet higher at the...

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