DXY | London Pre-Open/ Post- Sydney | 04:47:57 (UTC) Mon Aug 23
Trading analysts think that the Federal Reserve will stop its quantitative easing program sooner than originally expected, prompting traders to raise the value of the United States dollar to fresh all-time highs.
*For the US Dollar, someone now skewed the market in a mixed direction. Although the US Dollar (as measured by the DXY Index) has reached fresh all-time highs, investors think that the Federal
*Reserve will remove stimulus at a quicker pace than previously expected.
*Powell will give a lecture titled "The Economic Outlook" in Jackson Hole, Wyoming, on Friday, August 27, at 10 a.m. EDT/14 GMT. Powell is the chair of the Federal Reserve. Afterwards, in the
*Jackson Hole Conference Center, there will be a celebration to celebrate the occasion.
IG Client Sentiment Index shows a mixed tilt toward the US Dollar as we enter the last week of August.
Trading experts have begun to forecast that the Federal Reserve would phase down its stimulus package sooner than initially expected, perhaps as early as the beginning of the year, according to Reuters. It hit new yearly highs for the first time last week because of the strengthening of the US Dollar (as measured by the DXY Index). The EUR/USD exchange rate, which is the most significant component of the DXY Index, dropped by -0.81 percent and finished below 1.1700 for the first time since October 2020, marking a new low for the currency pair since that month. The decline in the stock market only resulted in a 0.16 percent rise in the dollar's value against the yen.
However, although the US Dollar gained ground across the board as escalating delta variant concerns eroded confidence in global growth-sensitive currencies, the pound fell -1.76 percent, the Australian dollar fell -3.13 percent, the New Zealand dollar fell -2.94 percent, and the Canadian dollar rose +2.47 percent, all against a backdrop of rising delta variant fears. Event risk activity is anticipated to increase significantly towards the end of August, with the vast bulk of it originating in the United States, according to industry forecasts. Five 'high' rated events have been scheduled for the Jackson Hole Economic Policy Symposium, which will take place over the course of a week and each of which has the potential to create significant event risk-based volatility in the market.
We expect that I will publish a flurry of economic data on Monday, August 23. The Chicago Fed's July national activity index, the August Market Manufacturing PMI (flash), and the July existing home sales data in the United States are all expected to be released in the coming weeks.
I will release detailed new home sales data for the month of July in the United States on Tuesday, August 24, according to the Bureau of Labor Statistics.
According to the timetable, I will disclose the data on durable goods orders in the United States on Wednesday, August 25, at 10:00 a.m.
Inauguration of the annual Jackson Hole Economic Policy Symposium will take place on August 26th, 2018. During this week, the Gross Domestic Product (GDP) report for the second quarter will be released, and I will also disclose the weekly jobless claims statistics. There will be two reports published on Friday, August 27: the July United States PCE report (which is the Federal Reserve's preferred measure of inflation) and an update on the August United States Michigan consumer confidence index (both of which will be released on Friday, August 27). In his Jackson Hole speech, which is provisionally titled "The Economic Outlook," President Powell will deliver his remarks on Monday, March 25th, at 10 a.m. Eastern Daylight Time/14 a.m. Greenwich Time. Because of new information received about the third quarter of this year, the Atlanta Fed's Catapan growth estimate has been lowered downward from a previously expected +6.2 percent annualized growth to a revised estimate of +6.1 percent annualized growth. Because of new data, the Federal Reserve has lowered its forecast for real estate investment growth in the third quarter from 3.4 percent to 3.0 percent in the current quarter.
The most current change to the Atlanta Fed's Catapan estimate for the third quarter of 2011 is expected to be released on Wednesday, August 25, 2011, according to the Atlanta Fed's website.
When we examine the relationship between the likelihood of a Fed rate hike and the yield on the 2-year US Treasury bond, we can determine if the bond market is responding in a manner similar to that which occurred in 2013/2014 when the Fed began implementing its tapering plans. According to historical data, the butterfly monitors changes in the yield curve that are not parallel to those in the United States, such as those in Europe. If historical trends hold true, intermediate rates should rise at a higher rate than short- and long-term rates, provided that the trend continues in the right direction. We can see that, although the July FOMC minutes, which clearly distinguished between rate hikes and tapering, had no impact on the probability of a rate hike, the US yield curve is changing in a way that suggests that the Fed will become more hawkish soon, as illustrated in the chart below. Since the Federal Reserve began talking about decreasing its bond purchases in June, the 2s5s10s butterfly has climbed to its highest rate to date, although a further 87 basis points (bps) of rate hikes are anticipated through the end of 2023, according to the Federal Reserve.
The combined effect of rising US Treasury yields – particularly when intermediate rates exceed both short- and long-term rates – combined with a greater probability of an increase in Federal Reserve interest rates has historically resulted in a more positive trading environment for the US Dollar. Traders increased their net-long US Dollar holdings to 19,206 contracts from 18,880 contracts for the week ending August 3, according to the Commitment of Traders ( COT ) data for the week ending August 3 published by the Financial Times. Since the second week of March 2020, according to Bloomberg statistics, the net long position in the US Dollar has been around its highest level since the beginning of the year. The dread of a Coronavirus pandemic reached its apex in the financial markets. In accordance with the IG Client Sentiment Index, consumers are feeling positive as we enter the last week of the month of August.
- Powell will give a lecture titled "The Economic Outlook" in Jackson Hole, Wyoming, on Friday, August 27, at 10 a.m. EDT/14 GMT. Powell is the Chairman of the Federal Reserve. Afterwards, in the Jackson Hole Conference Center, there will be a celebration to celebrate the occasion.
*For the US Dollar, someone now skewed the market in a mixed direction. Although the US Dollar (as measured by the DXY Index) has reached fresh all-time highs, investors think that the Federal
*Reserve will remove stimulus at a quicker pace than previously expected.
*Powell will give a lecture titled "The Economic Outlook" in Jackson Hole, Wyoming, on Friday, August 27, at 10 a.m. EDT/14 GMT. Powell is the chair of the Federal Reserve. Afterwards, in the
*Jackson Hole Conference Center, there will be a celebration to celebrate the occasion.
IG Client Sentiment Index shows a mixed tilt toward the US Dollar as we enter the last week of August.
Trading experts have begun to forecast that the Federal Reserve would phase down its stimulus package sooner than initially expected, perhaps as early as the beginning of the year, according to Reuters. It hit new yearly highs for the first time last week because of the strengthening of the US Dollar (as measured by the DXY Index). The EUR/USD exchange rate, which is the most significant component of the DXY Index, dropped by -0.81 percent and finished below 1.1700 for the first time since October 2020, marking a new low for the currency pair since that month. The decline in the stock market only resulted in a 0.16 percent rise in the dollar's value against the yen.
However, although the US Dollar gained ground across the board as escalating delta variant concerns eroded confidence in global growth-sensitive currencies, the pound fell -1.76 percent, the Australian dollar fell -3.13 percent, the New Zealand dollar fell -2.94 percent, and the Canadian dollar rose +2.47 percent, all against a backdrop of rising delta variant fears. Event risk activity is anticipated to increase significantly towards the end of August, with the vast bulk of it originating in the United States, according to industry forecasts. Five 'high' rated events have been scheduled for the Jackson Hole Economic Policy Symposium, which will take place over the course of a week and each of which has the potential to create significant event risk-based volatility in the market.
We expect that I will publish a flurry of economic data on Monday, August 23. The Chicago Fed's July national activity index, the August Market Manufacturing PMI (flash), and the July existing home sales data in the United States are all expected to be released in the coming weeks.
I will release detailed new home sales data for the month of July in the United States on Tuesday, August 24, according to the Bureau of Labor Statistics.
According to the timetable, I will disclose the data on durable goods orders in the United States on Wednesday, August 25, at 10:00 a.m.
Inauguration of the annual Jackson Hole Economic Policy Symposium will take place on August 26th, 2018. During this week, the Gross Domestic Product (GDP) report for the second quarter will be released, and I will also disclose the weekly jobless claims statistics. There will be two reports published on Friday, August 27: the July United States PCE report (which is the Federal Reserve's preferred measure of inflation) and an update on the August United States Michigan consumer confidence index (both of which will be released on Friday, August 27). In his Jackson Hole speech, which is provisionally titled "The Economic Outlook," President Powell will deliver his remarks on Monday, March 25th, at 10 a.m. Eastern Daylight Time/14 a.m. Greenwich Time. Because of new information received about the third quarter of this year, the Atlanta Fed's Catapan growth estimate has been lowered downward from a previously expected +6.2 percent annualized growth to a revised estimate of +6.1 percent annualized growth. Because of new data, the Federal Reserve has lowered its forecast for real estate investment growth in the third quarter from 3.4 percent to 3.0 percent in the current quarter.
The most current change to the Atlanta Fed's Catapan estimate for the third quarter of 2011 is expected to be released on Wednesday, August 25, 2011, according to the Atlanta Fed's website.
When we examine the relationship between the likelihood of a Fed rate hike and the yield on the 2-year US Treasury bond, we can determine if the bond market is responding in a manner similar to that which occurred in 2013/2014 when the Fed began implementing its tapering plans. According to historical data, the butterfly monitors changes in the yield curve that are not parallel to those in the United States, such as those in Europe. If historical trends hold true, intermediate rates should rise at a higher rate than short- and long-term rates, provided that the trend continues in the right direction. We can see that, although the July FOMC minutes, which clearly distinguished between rate hikes and tapering, had no impact on the probability of a rate hike, the US yield curve is changing in a way that suggests that the Fed will become more hawkish soon, as illustrated in the chart below. Since the Federal Reserve began talking about decreasing its bond purchases in June, the 2s5s10s butterfly has climbed to its highest rate to date, although a further 87 basis points (bps) of rate hikes are anticipated through the end of 2023, according to the Federal Reserve.
The combined effect of rising US Treasury yields – particularly when intermediate rates exceed both short- and long-term rates – combined with a greater probability of an increase in Federal Reserve interest rates has historically resulted in a more positive trading environment for the US Dollar. Traders increased their net-long US Dollar holdings to 19,206 contracts from 18,880 contracts for the week ending August 3, according to the Commitment of Traders ( COT ) data for the week ending August 3 published by the Financial Times. Since the second week of March 2020, according to Bloomberg statistics, the net long position in the US Dollar has been around its highest level since the beginning of the year. The dread of a Coronavirus pandemic reached its apex in the financial markets. In accordance with the IG Client Sentiment Index, consumers are feeling positive as we enter the last week of the month of August.
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