The dollar index (DXY00) on Tuesday rose by +0.26%. Weakness in stocks on Tuesday boosted the liquidity demand for the dollar. The dollar also has support on speculation Fed Chair Powell will remain hawkish when he speaks Friday at the Fed’s annual symposium in Jackson Hole, Wyoming. However, gains in the dollar were limited after T-note yields fell. Tuesday’s U.S. economic news was mixed for the dollar.
U.S. Jul existing home sales fell -2.2% to a 6-month low of 4.07 million, weaker than expectations of 4.15 million.
The U.S. Aug Richmond Fed manufacturing survey unexpectedly rose +2 to a 7-month high of -7, stronger than expectations of a decline to -10.
EUR/USD (^EURUSD) on Tuesday fell by -0.42%. The euro on Tuesday gave up an early advance and tumbled to a 2-1/4 month low. A recovery in the dollar Tuesday from early losses to higher on the day sparked long liquidation in EUR/USD. Also, Eurozone economic concerns weighed on the euro after Tuesday’s economic news showed France’s retail sales volume in July fell for the fourteenth consecutive month.
French Jul retail sales volume fell -2.1% y/y, the fourteenth consecutive month sales volume has declined.
USD/JPY (^USDJPY) on Tuesday fell by -0.23%. The yen on Tuesday rose moderately against the dollar. The yen found support Tuesday after the 10-year JGB government bond yield soared to a 9-year high at 0.670%, strengthening the yen’s interest rate differentials. The yen also garnered support Tuesday from a decline in T-note yields.
October gold (GCV3) Tuesday closed up +3.0 (+0.16%), and Sep silver (SIU23) closed up +0.110 (+0.47%). Precious metals prices Tuesday closed moderately higher, with silver posting a 2-week high. Weakness in stock prices Tuesday sparked some safe-haven demand for precious metals. Also, S&P Global Ratings cut the credit ratings on a handful of regional banks, which boosted safe-haven demand for precious metals. A stronger dollar Tuesday and higher T-note yields limited gains in metals. Also, ongoing fund liquidation in gold is bearish for gold prices after long gold holdings in ETFs fell to a 3-1/3 year low Monday.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
