Daily Market Update

Dollar Falls to Lowest Level Since January 2015

August 29, 2017

The U.S. dollar’s woes continued overnight and there doesn’t seem to be a short-term end in sight.  The Bloomberg Dollar Index touched a fresh low and reached its lowest points since January 22, 2015.

USD

The U.S. dollar’s woes continued overnight and there doesn’t seem to be a short-term end in sight.  The Bloomberg Dollar Index touched a fresh low and reached its lowest points since January 22, 2015. A North Korean missile launch caused equity markets to crumble, gold to rally and sent the greenback lower against the Japanese yen and Swiss franc. The U.S. dollar’s woes continued overnight and there doesn’t seem to be a short-term end in sight.  The Bloomberg Dollar Index touched a fresh low and reached its lowest points since January 22, 2015.  A North Korean missile launch caused equity markets to crumble, gold to rally and sent the greenback lower against the Japanese yen and Swiss franc. 

The fallout from Hurricane Harvey is also weighing on markets.  Gasoline prices continue to soar as many gas refineries have been offline since late last week. 

Some analysts have raised concern that the new North Korean provocation and Hurricane Harvey will distract our elected leaders from the pending debt-ceiling deadline.  Failure to raise the debt ceiling could cause the government to shut down and would lead to further dollar losses.

At 10 a.m., consumer confidence will cross the wire.  The biggest risk events remain Wednesday revision of second quarter GDP and Friday’s Non-farm payroll data.

 

EUR

The Euro continued to rally and touched its highest level since January 2, 2015.  The Euro broke above fresh technical and psychological levels overnight, showing the shared currency may have more room to improve.    The most recent rally can be attributed to Mario Draghi’s speech on Friday in Jackson Hole.  Softening Fed hike expectations and rising optimism in the EU has also led to the Euro’s gains. The Euro continued to rally and touched its highest level since January 2, 2015.  The Euro broke above fresh technical and psychological levels overnight, showing the shared currency may have more room to improve.    The most recent rally can be attributed to Mario Draghi’s speech on Friday in Jackson Hole.  Softening Fed hike expectations and rising optimism in the EU has also led to the Euro’s gains. 

The common currency is headed for its sixth straight monthly gain against the dollar, its longest winning streak in more than four years.

 

JPY

The safe-haven Japanese yen and Swiss Franc surged overnight after North Korea fired a missile over Japan causing equities around the globe to fall and saw investors rush to safe assets.  The North Korean missile flew over the northern island of Hokkaido and fell into the sea about 700 miles from the coast of Japan. Japan called Kim Jong Un’s actions a “unprecedented, grave and serious threat” and asked the United Nations Security Council to hold an emergency meeting.  President Trump has warned that “all options are on the table.” As long as tensions continue to rise, safe-haven assets such as the Yen will benefit.

 

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