Dollar Weakens on Rate Outlook; China Sticking to Growth Target Implies More Stimulus
• The dollar is heading for its weakest monthly performance in a year, with questions over when global interest rates will peak weighing on the currency.
• China is likely to maintain its 5% GDP growth target for 2023 despite economic headwinds, implying more fiscal stimulus is needed to meet the goal.
• Markets hope upcoming US inflation data remains tame, bolstering the view that the Fed is nearly done with interest rate hikes.
• Achieving consensus on tackling climate change at the COP28 summit looks difficult, but more climate financing from institutions like the World Bank would be a positive.
• The ECB is pushing back against market expectations for near-term rate cuts, wary of fueling renewed inflation pressures.