The US Dollar Held Steady, Close Below Recent Highs
The US dollar held near recent highs as investors awaited word from the Fed and questioned if dismal US data might halt the rate hikes.
Disappointing US services and industrial surveys reported overnight, as well as a drop in new home sales last month, pushed the dollar off a 20-year high against the euro, but not particularly hard given Europe’s underlying growth problems.
Everyone’s attention is now on Jackson Hole, WY, where the Fed is holding its annual symposium, and Fed Chair Jerome Powell is scheduled to talk.
The US dollar, which measures the greenback against a basket of currencies, increased 0.2% to 107.70 on Wednesday, closing in on July’s two-decade high of 108.19.
The Jackson Hole symposium will not provide us with many compelling reasons to sell dollars.
The euro temporarily bought $1 in NY trade. However, in Asia trade, it was under pressure. It traded at $0.9958, just above Tuesday’s low of $0.99005. Meantime, the Japanese yen also lost some gain it made overnight, lurking around 136.85 per dollar.
The S&P Global flash composite PMI for the United States fell to 44 in August. This was its lowest since 2020 and in contractionary territory for the second month in a row. Meanwhile, new house sales fell to a 6-1/2 year low.
After Britain’s composite PMI remained positive, the Sterling gained some aid overnight. However, this hasn’t changed investors’ pessimism about the UK or Europe’s prospects.
The pound traded at $1.1717. It hit a two-and-a-half-year low on Tuesday, at $1.1714.
It is just a matter of time before hard data discloses the truth about the brutal energy price rises affecting UK homes.
The AUD and NZD rose overnight but began to lose ground in the Asia trade. AUD declined 0.2% to $0.6713, while the New Zealand dollar fell 0.2% to $0.6292.
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