Tradingplush Americas TP news wrap 15 Sep: US dollar moves higher helped by higher rates.

  • Saturday, 16 September 2023 |1:41  GMT
  • Forex news for North American trading on Sep 15, 2023

The EUR has emerged as the top-performing major currency for the day. The USD has also displayed overall strength, recording gains against all major currencies except the EUR. Meanwhile, the JPY and NZD have shown relative weakness among the major currencies.

The strongest to the weakest of the majors.

The EUR’s upward momentum follows the European Central Bank’s decision to raise rates by 25 basis points, marking their 10th consecutive rate hike. Looking ahead to next week, the Federal Reserve is scheduled to convene on Wednesday, and the prevailing expectations are for them to maintain the current policy without any changes.

On Thursday, both the SNB and BOE are scheduled to convene, and there are anticipations of a 25 basis point rate increase from each. On Friday, the BOJ will hold its meeting, and market participants will be closely monitoring to discern any inclination towards tightening conditions.

The upcoming week promises significant developments in the realm of central banks.

The upward trajectory of the US dollar today was fueled by the ascent in interest rates. Economic data in the US exhibited a mixed performance, including:”

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  • NY Fed Manufacturing stronger: The actual index is at 1.90, which is a significant improvement from the prior period’s -19.00, though it was expected to be -10.00.
  • Import and Export Prices MM higher: The monthly import prices increased by 0.5%, surpassing the forecasted 0.3% and the previous month’s 0.4%. Export prices for the month rose by 1.3%, which is higher than the expected 0.4% and the previous 0.7%.
  • Industrial Production MM stronger: Industrial production increased by 0.4% monthly, which is higher than the expected 0.1% and the prior 1.0%.
  • Capacity Utilization SA stronger: The capacity utilization rate is 79.7%, slightly above the forecasted 79.3% and matching the prior period’s rate.
  • U Mich Sentiment Prelim weaker: The preliminary sentiment index from the University of Michigan is 67.7, lower than the expected 69.1 and the prior 71.2.
  • U Mich Conditions Prelim weaker: The conditions index stands at 69.8, compared to the expected 75.3 and the prior 77.4.
  • U Mich Expectations Prelim modestly stronger: The expectations index is at 66.3, slightly above the forecasted 66.0 and below the prior 67.3.
  • UMich 1Yr Inf Prelim lower: The 1-year inflation expectation came in at 3.1%, down from the prior 3.3%. while the 5 Yr inflation came in lower too at 2.7% vs 2.9% last month

In the US debt market, the weaker was ignored with yields moving higher across the yield curve:

  • 2 year 5.0347%, up 2.1 basis points
  • 5 year 4.4615%, up 4.3 basis points
  • 10 year 4.334%, up 4.4 basis points
  • 30 year 4.419%, up 3.4 basis points

For the trading week, yields were also higher, helping to push the DXY index higher on the week (although it was mixed vs the major currencies),

  • 2 year rose 4.2 basis points
  • 5 year rose 5.8 basis points
  • 10 year rose 6.8 basis points and closed at the highest level since November 2007
  • 30 year up 8.4 basis points and closed at the highest since April 2011.

In the forex market this week, the DXY is concluding the week at 105.33, marking a modest gain of 0.26%. This increase, however, propelled the price to its highest level since the trading week of November 21, 2022.

Looking at the major currency pairs, the currencies were mixed. The USD was higher vs the:

  • EUR, +0.36%
  • GBP, +0.66%
  • JPY, +0.036%
  • CHF, +0.53%

The greenback lost ground this week vs the commodity currencies with declines vs the:

  • CAD, down -0.86%
  • AUD, down -0.83%
  • NZD, down -0.23%

US stocks ended the day on a notably bearish note, led by significant losses in the broader indices. The Nasdaq experienced the steepest decline, plummeting by 1.56%, while the S&P 500 followed closely behind with a drop of 1.22%. The Dow Industrial Average, although relatively more resilient, still registered a decline of 0.83%, and only three out of its 30 constituent stocks managed to advance.

For the entire trading week, today’s declines shifted the fortunes of both the Nasdaq and the S&P into negative territory. The Nasdaq recorded a weekly decline of 0.39%, and the S&P posted a 0.16% decrease. In contrast, the Dow managed to eke out a modest gain of 0.12% for the week.

European indices closed the day and week higher:

  • German Dax rose 0.56% today and 0.97% for the week
  • France’s Cac rose 0.96% today and 1.91% for the week
  • UK’s FTSE 100 rose 0.50% and surged 3.12% this week
  • Spain’s Ibex rose 0.01% today and rose 1.98% this week.

IN other markets:

  • Crude oil did turn into negative territory intraday but is trading up $0.61 or 0.68% at $90.77. For the week, crude oil closed higher for the 3rd consecutive week adding 3.73% today
  • Gold moved higher by $13.93 today and was up 0.29% on the week
  • Silver rose 1.8% today and rose 0.50% on the week.

IN the digital currency Bitcoin, the price is trading at $26482 currently after trading quietly between $26228 to $26683.

Hoping you all have a good weekend. Thank you for your support. Next week will be dominated by the Fed, BOE SNB and Bank of Japan from Wednesday to Friday.

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