The dollar index (DXY00) Thursday rose by +0.07% and posted a 2-month high. The dollar Thursday recovered from early losses and moved higher after the 10-year T-note yield jumped to a 9-3/4 month high. Also, better-than-expected U.S. economic news on weekly jobless claims and the Aug Philadelphia Fed business outlook survey boosted the dollar. In addition, weakness in stocks sparked liquidity demand for the dollar Thursday after the S&P 500 fell to a 7-week low.
Thursday’s U.S. economic news was bullish for the dollar. Weekly initial unemployment claims fell -9,000 to 239,000, showing a slightly stronger labor market than expectations of 240,000. Also, the Aug Philadelphia Fed business outlook survey rose +25.5 to a 16-month high of 12.0, stronger than expectations of -10.4.
EUR/USD (^EURUSD) on Thursday fell by -0.12% and posted a 6-week low. The jump in the 10-year T-note yields to a 9-3/4 month high Thursday strengthened the dollar’s interest rate differentials and weighed on the euro. Also, dovish comments from ECB Governing Council member Kazaks weighed on EUR/USD when he said he was undecided on an ECB rate hike in September.
ECB Governing Council member Kazaks said he was undecided on an ECB rate hike in September and said, "If we look at the coming months, if there'll be increases in interest rates, then they'll be really very small."
USD/JPY (^USDJPY) on Thursday fell by -0.48%. The yen on Thursday recovered from a 9-1/4 month low against the dollar and moved higher after the 10-year JGB bond yield rose to a 2-week high, strengthening the yen’s interest rate differentials. A slump in the Nikkei Stock Index to a 2-1/2 month low Thursday also boosted safe-haven demand for the yen. Weaker-than-expected Japanese economic news Thursday initially put pressure on the yen.
The Japan Jun tertiary industry index fell -0.4% m/m, weaker than expectations of -0.2% m/m.
Japan Jul exports fell -0.3% y/y, weaker than expectations of -0.2% y/y and the biggest decline in over two years. Also, Jul imports fell -13.5% y/y, the biggest decline in 2-3/4 years.
Japan Jun core machine orders rose +2.7% m/m, weaker than expectations of +3.5% m/m.
October gold (GCV3) Thursday closed down -13.1 (-0.69%), and Sep silver (SIU23) closed up +0.180 (+0.80%). Precious metals prices Thursday settled mixed, with gold falling to a 5-month low. Gold prices had some negative carryover from Wednesday’s Jul FOMC meeting minutes that stated policymakers saw “significant” inflation risks that may merit more rate hikes. Also, higher global bond yields Thursday weighed on precious metals prices. In addition, fund liquidation in gold continues after long gold holdings in ETFs fell to a 3-1/3 year low on Tuesday.
Losses in gold were limited after the S&P 500 fell to a 7-week low, which boosted the safe-haven demand for gold. Also, silver found support on Thursday’s stronger-than-expected U.S. economic news on weekly jobless claims and the Aug Philadelphia Fed business outlook survey, which is positive for economic growth prospects and industrial metals demand.
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.
