The U.S. Dollar is trading in strong ranges, getting back to its best levels overall since the month began per the Bloomberg Dollar Spot Index.
Overview
The Buck is climbing all across the board as markets look for yield in a financial environment that is hoping more stimuli arrives down the line. Comments from U.S. Treasury Secretary Scott Bessent affected the yield curve after saying that the Fed should be far more aggressive with rate cuts echoing sentiment from the latest member added to the Federal Open Market Committee, Stephen Miran. The speculatory talk about how the Fed will act for the remainder of the year will not go away as the two scheduled meetings carry odds of over 80.0% that another 50 basis points will be reduced.
While FX flows remain relatively tight, equities have remained steady with the S&P 500 Index marking 107 sessions without a drop in value of more than 2.0%. This represents the longest such streak in over a year. Later at 10AM we will get New Home Sales figures for August while more impactful data will be released tomorrow in the form of Gross Domestic Product with its final reading for Q2 and Durable Goods Orders for August. There are a few negotiations in the works that could result in idiosyncratic moves for some pairs as Swiss as well as Indian decisionmakers are trying to work on a trade deal with the U.S. to eliminate or at least reduce high tariffs recently levied.
What to Watch This Week…
- Durable Goods Orders on Thursday 8:30AM
- US GDP on Thursday 8:30AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
CHF ⇓
The Swiss Franc has fallen in value ahead of tomorrow’s Swiss National Bank meeting, in which interest rates are expected to remain at 0.0%. Although policymakers have explained that they do not desire to enter into negative-rate territory, the currency is down primarily as risk markets dwindle, and trade delegates continue to work with U.S. counterparts to make a deal. SNB officials in the past had mentioned a desire to see the Swiss Franc depreciate, but the opposite has occurred all year long. The current exchange is only 1.0% away from the strongest CHF level since 2011.
INR ⇓
The Indian Rupee hit its lowest level against the Buck as the combination of U.S. policies are making for business headaches in the subcontinent. Indian trade has been affected by the 50.0% tariff that came into effect on August 27th, a result of disagreement over purchases of Russian oil, which counters U.S. sanctions. Reports have also indicated India is in talks about the issuing of visas after it was announced the U.S. government would start charging some high fees. Thus far in the month, Rupee has been an exception in the Emerging-Markets Currency basket by losing over 0.6% value to the Buck while the MSCI Emerging-Markets Currency Index has jumped by a little over that pace, close to one percent.
