Main financial assets discussed: Euro (EUR), U.S. dollar (USD), Invesco CurrencyShares Euro Trust (FXE) ETF
Top 3 key points:
1. The relative interest rate differential between the European Central Bank (ECB) and the U.S. Federal Reserve (Fed) has been a key driver of the Euro's strength against the U.S. dollar in the past.
2. The changing tone of the ECB, with President Christine Lagarde being more dovish, and the diverging economic performance between the U.S. and Europe suggest that the Euro may weaken against the U.S. dollar.
3. Speculative positioning in the Euro is at its longest in years, and technical indicators suggest a potential breakdown in the Euro's value.
Recommended actions: **Sell** the Euro or the FXE ETF. Short the Euro directly via FX markets or buy a put spread on the FXE ETF.
### Summary
The strength of the U.S. dollar against other currencies, such as the Nigerian naira and Zimbabwean dollar, has made it difficult for local consumers to buy foreign goods, leading to economic troubles in these countries.
### Facts
- 💰 The strength of the U.S. dollar has pushed the price of foreign goods beyond the reach of local consumers in Nigeria.
- 💸 Many developing countries are unhappy with the dominance of the U.S. dollar in the global financial system.
- 🌍 The BRICS bloc, which includes Brazil, Russia, India, China, and South Africa, will discuss their grievances against the dollar at a meeting in Johannesburg, South Africa.
- 💵 The alternatives to the U.S. dollar, such as the euro and China's yuan, have not been able to rival its dominance.
- 🇦🇷 In Argentina, a presidential candidate is calling for the U.S. dollar to replace the country's troubled peso.
- 💼 In Zimbabwe, the U.S. dollar is widely used in transactions due to the instability of the Zimbabwean dollar.
- 💸 Vendors in Zimbabwe are even mending damaged U.S. dollar bills for a small fee due to a shortage.
### Credit
By: Dionne Searcey and Constant Méheut
Source: The Washington Post
The US dollar weakened slightly against major peers as traders awaited a speech from Federal Reserve Chair Jerome Powell, while the yen pulled away from a nine-month low and China's yuan briefly rose following attempts to bolster the currency.
The US dollar remains strong against major peers and the yen, as Treasury yields rise amid expectations of high US interest rates for a longer period, while China's central bank sets a stronger-than-expected daily midpoint for the yuan to counter mounting pressure on the currency.
The US Dollar strengthens as several BRIC countries express support for the currency, while Fed officials remain quiet on rate cuts, and geopolitical tensions boost the Greenback during US trading hours.
The weakening of the U.S. dollar could benefit companies that export products and services, while importers may have to pay more for the goods they bring in, leading them to hold off on purchases. However, a more stable dollar can benefit both importers and exporters.
European shares edge higher and the dollar remains strong as investors await remarks from the heads of the Federal Reserve and European Central Bank at a conference in Jackson Hole.
The dollar is expected to continue strengthening as bond yields rise, with the Fed likely to hike rates at least once more this year, and a barrage of economic data this week will heavily influence Fed policy decisions and impact the direction of the dollar and interest rates.
The US Dollar performed well against major currencies, with the British Pound, Euro, and Canadian Dollar underperforming, while the Chinese Yuan and Australian Dollar fared better; the Federal Reserve's indication of a higher terminal rate and potential further borrowing cost increases contributed to the market sentiment, leading to lower US equity markets; upcoming economic data includes consumer confidence, inflation gauges from key European countries, and manufacturing PMI gauges from China.
The US Dollar experienced a significant decline due to weak economic data and increased risk appetite, while the Euro and British Pound strengthened. The Australian Dollar and New Zealand Dollar also performed well, and gold and cryptocurrencies rallied.
The Indian rupee is expected to strengthen against the US dollar due to weaker-than-expected US job openings, causing a decline in the dollar index and Treasury yields.
The Canadian dollar strengthens slightly against the US dollar in August despite concerns about China's economy and a decline in commodity-linked currencies.
The Canadian dollar weakened against the US dollar after data revealed that the country's economy unexpectedly contracted in the second quarter, reducing the likelihood of an interest rate hike from the Bank of Canada.
The dollar remained stable as investors weigh US jobs data that showed signs of cooling and the likelihood of the Federal Reserve ending its monetary tightening cycle.
Europe's struggle with inflation and economic growth contrasts with the United States, as the European Central Bank's aggressive tightening risks pushing the euro zone into a downturn, with the manufacturing and services sectors already showing signs of contraction.
The dollar strengthens against the yen and keeps the euro and sterling near three-month lows as investors rely on the resilience of the U.S. economy, while China's onshore yuan hits a 16-year low due to a property slump and weak consumer spending.
The Canadian dollar strengthened against the US dollar as stronger-than-expected jobs data raised the possibility of another interest rate hike by the Bank of Canada.
The US Dollar performed strongly against major currencies, with the Euro experiencing its 8th consecutive weekly loss and the Chinese Yuan performing poorly, while global market sentiment was negative and stock markets weakened. In the coming week, market focus will be on the US inflation report, UK employment and GDP data, Australian employment data, and the ECB rate decision.
The US dollar's dominance as the world's reserve currency is at risk due to growing debt in the US, according to economist Barry Eichengreen, highlighting the importance of controlling debt to maintain the dollar's global role.
The Mexican peso and other Latin American currencies strengthened as a weaker dollar and positive economic data from China boosted metal prices and supported resource-rich countries in the region.
The resilient growth of the US economy is fueling a rebound in the dollar and causing bearish investors to rethink their positions, although the currency's rally may face challenges from upcoming data and the Federal Reserve's meeting this month.
The euro has been continuously decreasing in value against the dollar for the eighth consecutive week, reflecting the economic challenges faced by Europe, including high inflation and the specter of recession, while the United States has better control over inflation and a stronger labor market, leading to a widening gap between the euro and the dollar.
The U.S. dollar stabilized as traders await U.S. inflation data, while sterling weakened after the U.K. economy contracted more than expected in July.
Gold gained as the dollar weakened against the yuan due to positive China economic data, although the possibility of further U.S. interest rate hikes kept investors cautious.
The US Dollar underperformed against major currencies last week, crude oil continued to rally, and gold prices were cautiously higher, while upcoming events like central bank rate decisions and the Bank of England rate hike are expected to impact the market.
European markets are pessimistic ahead of central bank meetings, energy prices raise the risk of secondary inflation, and the US dollar is gaining strength, which may negatively impact precious metals and cryptocurrencies.
The Federal Reserve's continued message of higher interest rates is expected to impact Treasury yields and the U.S. dollar, with the 10-year Treasury yield predicted to experience a slight increase and the U.S. dollar expected to edge higher.
The US dollar remained strong against other currencies as traders awaited the Federal Reserve's rate decision, while the yen hovered near a 10-month low amidst speculation of intervention.
The dollar strengthens and stocks decline as the Federal Reserve delivers a "hawkish pause" during the Fed meeting, with updates on the interest-rate decision, dot plot, and Jerome Powell press conference.
Summary: The US Dollar had mixed performance against major currencies, with the British Pound weakening and the New Zealand Dollar rallying; Wall Street took a hit after the Federal Reserve announcement, and the 10-year Treasury yield surged to its highest level since late 2007.
The U.S. dollar remains strong above the $105 mark, supported by the hawkish stance of the Federal Reserve and increased Treasury yields, while gold prices consolidate and oil prices rebound due to supply cuts and positive outlooks for the U.S. and China.
The U.S. dollar is gaining strength, causing concerns about interest rates and negatively impacting the S&P 500.
The Euro has recovered from the psychological level of 1.0500 against the US Dollar, supported by USD weakness, but the sustainability of the move is uncertain.
Bitcoin and gold are expected to thrive amidst fiscal problems in the US economy and a potential pivot from the Federal Reserve, according to macro investor Luke Gromen. Gromen also suggests that the launch of a gold-backed currency by the BRICS alliance may weaken the US dollar as the world's reserve currency.
Surging U.S. real yields are strengthening the dollar's rebound and making it more profitable to bet on the currency, while also increasing the cost for bearish investors to bet against it.
The dollar weakened and global equities dipped as investors grappled with U.S. unemployment data suggesting a tight labor market and the Federal Reserve's commitment to higher interest rates, while European stocks rebounded from losses.
The U.S. dollar reached a one-week high against other currencies following the release of U.S. consumer prices data, which increased expectations for higher interest rates; safe-haven buying also contributed to the dollar's strength due to escalating Middle East conflict.
The Canadian dollar weakened against the US dollar as US bond yields rose after higher-than-expected US inflation data, making the US dollar more attractive to foreign investors and putting pressure on the loonie.
The Canadian dollar weakened against the US dollar as investors anticipate the Bank of Canada keeping interest rates unchanged following lower-than-expected inflation data.
The US dollar remains strong, supported by rising yields and tensions in the Middle East, but it is too early to determine if it has reached its peak, as the market awaits further tightening from the Federal Reserve and economic convergence among countries.
The US Dollar remains stable as US yields continue to provide support, with Q3 GDP growth expected to accelerate before a potential slowdown in Q4.
The US dollar weakened against a basket of currencies as Treasury yields fell, while attention turned to upcoming US economic data ahead of the Federal Reserve's monetary policy meeting.
The U.S. dollar strengthened to a near 1-week high against a basket of currencies as investors turned away from riskier currencies due to lackluster corporate results and rising Treasury yields.
The upcoming release of strong U.S. GDP data is expected to boost the U.S. dollar and result in lower values for EUR/USD and AUD/USD in the near term.
The US dollar strengthens as long-term yields rise, while market movements are influenced by geopolitics and interest rates rather than earnings.
