The U.S. Dollar is trading in favorable ranges, likely to close the week 1.0% stronger overall per the Bloomberg Dollar Spot Index.
Overview
Indeed, a combination of risk items has combined for a mix of havoc across global markets, plaguing all sectors with plenty of pessimism. Thus far in August, it has meant the appreciation of the Buck by almost 2.0%. A troubled China, changing dynamics in trade, and lack of progress in most countries in comparison to an expanding U.S. economy are factors characterizing the surge.
The high yields in bonds, indicative of concern over monetary tightening and inflation, are causing risk-aversion all across various asset classes, with the Nasdaq 100 losing 1.0%, the MSCI World Index declining by 2.7%, and oil experiencing its first weekly loss since June. We shall see what meets us next week as we get very little in terms of impacting data until the tail end of August. A resilient U.S. economy now growing faster than anyone thought while the rest of the world struggles to play catch-up is key to the current positivity for the greenback that is certainly merited and tough to break away from.
What to Watch Today…
- No major economic events are scheduled for today
- Monex USA Online is always open
EUR ⇓
The Euro has dropped to its weakest point since the beginning of July as economic worry overtakes any hopes of a global “soft-landing” after a period of increasing borrowing costs and seeing struggle in economic expansion. There are worries idiosyncratically for each of the member nations of the euro-zone, but the biggest problem is clearly Germany. The current administration is hoping to revive productivity and gains through Green investments, but opposition is growing politically, particularly from political parties seeking much larger-scale changes to how the country operates within Europe. The Euro-zone’s biggest engine looks weak after not meeting promises to equip Ukraine militarily, and the mood economically is anemic. Euro will have to get some great headlines and impressive indicators to change course.
MXN ⇓
The Mexican Peso has remained on a weakening trend following a week of turbulence and doubts over the second half of the year in terms of global stability. While some economic outlooks have been upwardly updated, oil and other commodities are seeing their future demand forecast with uncertainty. With the first weekly loss for oil since June, expect some to go maniacal over the negativity the globe is experiencing, crushing faith in investment. The remainder may not offer much other than speculation about the heavy month to come in September.
