July 2024 in Figures – Currency Thoughts
July 2024 in Figures
July 31, 2024
From a geopolitical standpoint, July was a tumultuous month. Britain got a new government, and the second round of French elections deprived the Far Right of the win that had seemed inevitable. U.S. Republican presidential candidate Trump barely escaped an assassination attempt, and President Biden gave up his quest for a second term, shifting the race to a Harris-Trump choice. Israel’s war escalated, and Ukraine suffered some losses against Russia.
On the economic front, speculation rose considerably that the Federal Reserve will begin cutting interest rates in September. A paradox continued that while a majority of U.S. voters rate the Biden Adminstration’s handling of the economy poorly, data comparisons with other industrialized economies put the United States well above its peers.
Only the Bank of Japan among central banks featured in the table below changed its interest rate during July, and the hike from a range of 0.0-0.1% to 0.25% exceeded expectations. Among central banks not included in the table, interest rates were cut during July by 100 basis points in Pakistan, 50 bps in Uzbekistan, and 25 bps in Sri Lanka, Serbia, Kazakhstan, Hungary, Armenia, and Canada. Central banks in America’s two geopolitical enemies also changed. Russia may be doing better in its war against Ukraine, but its economy is paying a costly price that forced the Bank of Russia to lift its interest rate benchmark by 200 basis points. China keeps boasting that its authoritarian political regime is better suited for handling the economy, but the depressed consumer sector there isn’t buying such. The People’s Bank of China cut its Loan Prime Rates by 10 basis points.
Ten-year sovereign debt yields closed lower for the month, but Japan was a notable exception. It was a much more volatile month for equities in most cases than the net changes in the table below would suggest.
Japan’s foreign exchange market intervention backed up by the interest rate hike at the end of the period elicited a much greater impact on the yen, which climbed sharply, than the Fed’s signal of a possible rate cut at end-summer had on the dollar.
The prices of Bitcoin and gold rose in July, while oil fell. Trump’s plans to promote crypto currencies in a second term and his drill baby drill approach to fossil fuel production exerted noticeable effects on Bitcoin and oil prices, and a the scenario of an even more chaotic second term should he win the November election provided another reason for investors to diversify into gold.
| 10-Yr Yield | 06/28/24 | 07/31/24 | July Change |
| U.S. | 4.35% | 4.06% | -29 Basis Points |
| Germany | 2.49% | 2.30% | -19 |
| Japan | 1.04% | 1.04% | 0 |
| U.K. | 4.17% | 3.97% | -20 |
| Canada | 3.50% | 3.17% | -33 |
| Switzerland | 0.46% | 0.38% | -8 |
| CB Policy Rate | 06/28/24 | 07/30/24 | July Change |
| Fed funds target | 5.25/5.50% | 5.25/5.50% | 0 basis points |
| ECB refi rate | 4.25% | 4.25% | 0 |
| BOJ policy rate | 0.0 to 0.10% | 0.25% | +15 |
| BOE Bank Rate | 5.25% | 5.25% | 0 |
| Swiss Policy Rate | 1.25% | 1.25% | 0 |
| FX | 06/28/24 | 07/31/24 | July Chg in $ |
| EUR/USD | 1.0709 | 1.0823 | -1.1% |
| USD/JPY | 160.82 | 149.46 | -7.1% |
| USD/CHF | 0.8986 | 0.8796 | -2.1% |
| GBP/USD | 1.2635 | 1.2857 | -1.7% |
| AUD/USD | 0.6466 | 0.6542 | -1.2% |
| NZD/USD | 0.6090 | 0.5952 | +2.3% |
| USD/CAD | 1.3688 | 1.3809 | +0.9% |
| USD/CNY | 7.2677 | 7.2196 | -0.7% |
| Equities | 06/28/24 | 07/31/24 | July Change |
| S&P 500 | 5471 | 5521 | +0.9% |
| Nasdaq | 17733 | 17599 | -0.8% |
| Djia | 39123 | 40843 | +4.4% |
| Dax | 18236 | 18509 | +1.5% |
| Nikkei | 39583 | 39102 | -1.2% |
| Ftse | 8164 | 8368 | +2.5% |
| Canada TSE | 21818 | 23084 | +5.8% |
| Swiss SMI | 11994 | 12317 | +2.7% |
| Commodities | 06/28/24 | 07/31/24 | July Change |
| Oil, $ per barrel | 81.32 | 78.36 | -3.6% |
| Gold, $ per ounce
Bitcoin, $ |
2385.40
60296 |
2495.50
64222 |
+4.6%
+6.5% |
Copyright Larry Greenberg 2024. All rights reserved. No secondary distribution without express permission.
Tags: financial market changes in July 2024
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