USD hits new 7-month low

In the meantime, within the US market, the US Greenback Index (DXY) measuring the buck’s fluctuations in opposition to six main currencies (EUR, JPY, GBP, CAD, SEK, CHF) decreased by 0.51% to 101.38.

USD change price in the present day on this planet

The US greenback continued to hit a recent seven-month low within the final buying and selling session, as merchants await feedback from Federal Reserve Chairman Jerome Powell later this week, which might present clues on the tempo of the US financial easing cycle.

In the meantime, the EUR closed the buying and selling session at 1.1078 USD, after reaching 1.1087 USD, the very best degree since December 28 within the earlier buying and selling session.

DXY Index volatility chart over the previous 24 hours. Picture: Marketwatch

This week, the market’s focus is on Chairman Powell’s speech on the annual assembly of central banks in Jackson Gap, together with the minutes of the Fed’s most up-to-date assembly.

Some analysts say the Fed will determine within the coming weeks whether or not to chop 50 to 75 foundation factors this 12 months, or 150 foundation factors or extra. They add that Jackson Gap is the primary alternative for the Fed to push again in opposition to a 50 foundation level reduce at one in every of its remaining three conferences this 12 months.

Whereas the labor market slowdown has led to expectations of sooner financial easing, upbeat retail gross sales have modified expectations. Nevertheless, the U.S. financial system stays “weak to a recession if there’s a monetary shock,” stated Thierry Wizman, world FX and rates of interest strategist at Macquarie.

Markets are pricing in a complete of 94 foundation factors of Fed price cuts this 12 months. Most economists polled by Reuters anticipate the Fed to ease by 25 foundation factors at every of its remaining three conferences this 12 months.

Expectations in regards to the final result of the US presidential election are additionally weighing on the buck. Traders anticipate the buck to rise if Donald Trump wins as a result of tariffs would assist the foreign money and better fiscal spending would enhance rates of interest.

The Japanese yen weakened barely, at present at 146.98 yen per greenback, nonetheless anchored close to a virtually two-week excessive it hit within the earlier session, however properly off the seven-month excessive of 141.675 it hit in early August.

Tokyo authorities interventions early final month and a shock rate of interest hike pulled the yen off a 38-year low of 161.96.

Traders might be targeted on Financial institution of Japan Governor Kazuo Ueda’s look earlier than parliament on August 23. Ueda is predicted to debate the Financial institution of Japan’s choice to boost rates of interest final month.