2023-08-22 19:17:29
The US dollar edged higher once morest a basket of currencies on Tuesday, nearing a two-month high hit last week, as traders await the Jackson Hole symposium later in the week.
The U.S. dollar index – which measures the currency once morest six major counterparties – was up 0.2% at 103.57. The index sits just off the two-month high of 103.68, hit last week, as concerns over China’s economy and bets on US interest rates staying high drove climb the greenback.
Overall movements in currency markets are expected to be limited ahead of Federal Reserve Chairman Jerome Powell’s speech at the Fed’s central bank symposium in Jackson Hole, Wyoming, scheduled for Aug. 24-26.
“Powell’s intervention will be watched very closely,” said Helen Given, a forex trader at Monex USA in Washington.
“I don’t see any major moves for the dollar ahead of the symposium; no one wants to be caught on the wrong side of the market,” she added.
Traders were also paying attention to the summit of major emerging economies BRICS (Brazil, Russia, India, China and South Africa) currently taking place in Johannesburg, for news on China’s stimulus measures.
“For now, the world is watching China eagerly, awaiting further stimulus,” Monex’s Given said.
“It would be an overstatement to say that China’s economic recovery is running out of steam at this point; the indications are of a shrinking economy, which is keeping riskier assets low,” he said. she added.
Chinese leader Xi Jinping told the bloc of BRICS nations on Tuesday that the Chinese economy is resilient and the fundamentals of its long-term growth remain unchanged.
Riskier assets took a hit last week and US Treasury yields hit nearly 16-year highs as investors worried regarding slowing Chinese economic growth and traders braced for rates to fall. US interest rates stay high longer.
The yen remained under pressure as traders watched for any sign that the Japanese government was ready to step in to support the currency, as it did last year.
The dollar fell 0.24% once morest the yen, but is not far from the 9-month high reached last week.
“I still expect it to hit the 147 mark. Last week, verbal signals from the Bank of Japan brought temporary respite to the currency, but if the yen can’t hold its ground, I still see strong potential for intervention,” said Monex’s Given.
The battered Chinese yuan briefly strengthened to its highest level in a week before weakening once more as worries regarding the economy continued to weigh on the currency.
China’s central bank pegged the yuan’s midpoint at 7.1992 to the dollar on Tuesday, 1,105 pips higher than Archyde.com’ estimate, seeking to hold a floor under the currency following it fell to a 9-month low. and a half from 7.349 in offshore trading last week.
Tuesday’s fix follows smaller and more limited interest rate cuts than markets expected a day earlier, as stimulus continued to fall short in the face of turmoil in the housing sector and weakening economic growth.
The pound slipped
0.1
% on Tuesday, little reassured by a moderate recovery in risk appetite.
Turning to cryptocurrencies, bitcoin was down 0.87% to $25,897, sitting above a two-month low hit last week as overall sentiment in the cryptocurrency market cryptocurrencies remained bearish.
1692752426
#Dollar #strengthens #ahead #Jackson #Hole #symposium