Forexlive Americas FX News Wrap: USD Rises as Flows Move From Other Currencies


The USD rose in trade today as the focus shifted from the drop in inflation seen this week in the US to unrest in other countries. The German Rhine has fallen below a critical navigation level which could impact energy (coal runs through the river), hydropower, trade, slow growth and increase inflation. This is not good news for the EU. The GBP has been impacted and also suffers from higher energy costs with higher temperatures.

NZD is strongest and GBP is weakest

GBP, JPY and EUR end the day as the weakest of the major currencies, while NZD and USD are the strongest.

Next week, the RBNZ is expected to continue its tightening program with another 50 basis point hike. The US Fed will release the minutes of the last FOMC rate meeting where the Fed tightened 75 basis points and moved the target rate to “neutral” at 2.5%.

Today the Richmond Fed’s Barkin reiterated a number of Fed officials’ sentiments, saying he wants inflation to stay lower for an extended period and until the rate hits its level. target of 2%, the Fed would continue to tighten its policy. He did not commit to 50 or 75 basis points citing the number of inflation and employment reports that have yet to be released.

Michigan’s preliminary consumer sentiment index came out better than expected, but was mixed on the details. Although expectations have risen to 54.9 from 47.3, current conditions have moved to 55.5 from 58.1 last month. Inflation expectations were also mixed, with 1-year expectations rising from 5.2% to 5.0%, with 5-year expectations rising to 3.0% from 2.9% last month.

In other markets before the weekend:

  • Spot gold is trading at $1,801.44, up $12.06 or 0.67% today. For the week, the precious metal is up 1.54% and 7.16% from its July 21 low.
  • Silver spot is up $0.51 or 2.46% at $20.80. For the trading week, the price is up 4.61%
  • WTI Crude Oil is trading down $2.45 at $91.89. For the week, the price is still up 3.77%
  • Bitcoin is trading at $24,254. Since last Friday’s close, the price is up 4%.

In the US debt market, returns are mixed today:

  • 2 years 3.246%, +2.3 basis points
  • 5 years 2.960%, -3.0 basis points
  • 10 years 2.838% -5.1 basis points
  • 30 years 3.114%, -6.5 basis points

For the trading week, the:

  • Fall in 2-year yields -2.8 basis points
  • The 5-year return is stable
  • The 10-year return is stable
  • The 30-year yield is up 4.3 basis points

In the US stock market today, the week ended with strong gains led by the Nasdaq which rose more than 2%. Over the week, the major indices made their fourth consecutive gain. Earnings for the week showed:

  • Dow, +2.92%
  • S&P +3.25%
  • Nasdaq +3.08%

The Nasdaq is now up 23.4% from its low, but still remains at -16.6% from the high. The Dow Jones is down only -7.2% from its all-time high and the S&P is still down -10.18%.

For the week, the biggest Dow 30 gainers were:

  • Disney +14.01%
  • Dow, +8.62%
  • Travelers, +7.93%
  • Caterpillar, +6.18%
  • Goldman Sachs, +5.72%

Dow laggards included:

  • J&J, -3.4%
  • Visa, -2.10%
  • Sales force, -0.15%
  • Verizon, +0.44%
  • Coca-Cola, +0.5%

The week was again dominated by so-called meme actions:

  • Bed bath and beyond, increased by 58.7%
  • Express grew by 17.2%
  • AMC increased by 8.96%

Other big winners include:

  • First Solar, +15.76% after the passage of the Inflation Reduction Act
  • Snap, +14.15%
  • Soft, +12.47%
  • Netflix, +9.93%
  • Meta, +8.01%


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