Dollar Strengthening

August 28, 2024

The weighted DXY index of the dollar recorded a larger than usual 0.6% advance today, with gains of 0.7% versus the euro, 0.5% against the yen, 0.4% relative to sterling, and 0.3% against the Swiss franc, kiwi, and Aussie dollar. Investors eagerly await the next significantly clue, which will be Nvidia’s quarterly earnings report later today. A feared full-scale middle eastern war has not yet emerged, but Israel’s incursion into the West Bank has been a fresh development today. The U.S. election’s likely result remains too unclear to lend definitive market direction, even though the Dems and Reps offer very divergent economic policy plans.

Equity markets this Wednesday closed up 0.8% in Taiwan and Indonesia but down 1.0% in Hong Kong, 0.4% in China and 0.2% in Japan. The German Dax is showing a 0.7% advance, but other European stock indices and U.S. changes have been modest. Ten-year sovereign debt yields fell four basis points in Germany and France, rose two bps in Japan and are flat in the United States despite another weekly drop revealed in the 30-year fixed mortgage rate last week. It’s 6.44% level was the lowest in a bit more than a year and down from 7.29% just four months earlier.

West Texas Intermediate oil slumped 1.3%, and gold has dropped 0.8%. Bitcoin‘s price, however, is 0.9% firmer today.

The aforementioned slide in U.S. mortgage rates has been associated with a net 12.8% revival of U.S. mortgage applications over the past four weeks.

Among European economic data news reported today,

French consumer confidence rose a point in August and touched its best level since Russia invaded Ukraine. But the range of readings since February 0f 90 to 92 remains narrow.
Italian industrial sales ticked 0.1% higher in June after a 1.0% drop in May, continuing the pattern of directional shifts that began eight months earlier. Sales were 3.7% lower than in mid-2023, extending the string of on-year declines to 16 straight months.
Swiss investor sentiment swung from a reading of 9.4 in July to -3.4 in August, returning to sub-zero territory for the first time since a 23-month streak of negative readings ended last January.
On-year M3 money growth in the euro area remained unchanged at 2.3% in July. Year-on-year growth in loans to households (0.5%), loans to non-financial firms (0.6%), and overall credit (0.3%) remained meager.
Austria’s manufacturing purchasing managers index, which has printed below the 50 breakeven level since August 2022, recovered 1.3 points to a 3-month high in 44.4 in April, indicating a less steep but nonetheless solid rate of contraction in that sector.
Sweden’s SEK 59.8 billion trade surplus in January-July was 66.6% wider than a year earlier.
British shop prices were 0.3% softer than a year earlier in August, their largest on-year dip in 34 months.

Malaysian producer price inflation of 1.3% in July was the least in five months. Such had imploded from 13.2% in October 2021 to -4.8% in May 2023.

Japan’s June index of leading economic indicators in June was revised marginally upward but was still at a 17-month low. The index of coincident economic indicators slid to a 4-month low.

Tags: French consumer confidence, U.S. mortgage applications

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on Wednesday, August 28th, 2024 at 7:26 am and is filed under New Overnight Developments Abroad – Daily Update.
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