The U.S. Dollar is rallying following a weekend of worry for global equities as the debt problem in China seems to be such that a major developer tycoon in Evergrande is about to collapse.
Overview
The Chinese government is said to be unable to keep this from happening because of the unsurmountable debt the firm has incurred. This market shock is causing all kinds of havoc in an already fragile trading environment. European equities had the worst decline in over a year while futures here are down already 1.0%. Prices of raw materials and metals are down as the concern grows that other companies are in line for the same type of financial crash.
Overall, the buck is about a half percent better across the board on average. The advancement continues. Per the Bloomberg Dollar Spot Index, the buck is already at the best level in a month. Lots of anxiety will be dealt with while domestically the focus is verbal arguments to try getting something done on spending. Additionally, Treasury Secretary Janet Yellen warned that the debt ceiling must be raised again for the U.S. to pay its bills.
What to Watch Today…
- No major economic events scheduled for today
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EUR ⇓
The Euro fell to one-month lows as the crisis in China is making everyone nervous about the economic path of the world’s second-largest economy. An already downwardly revised outlook for the economic recovery now has to add to it a possible debt crisis all over China as the struggle to contain the pandemic remains. September is turning out to be a busy month for the rise of new challenges even as countries admit to being exhausted from the longevity of the battle with COVID. Expect swings as the reaction is likely to be all over the place as the week progresses.
GBP ⇓
The Canadian Dollar is losing naturally as a result of all the doubt surrounding energy markets as well as the value of raw materials as China copes with trouble. Politically, it seems like the country will continue to be administered by Prime Minister Justin Trudeau after general elections he believed he could succeed in and grab a clearer majority for him and his party. Thus far, it looks like he will get somewhat close, but not achieve the results he thought possible. Weakest “Loonie” since February.
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