The Moment Of Truth For The U.S. Dollar


Summary

The fall since January.

Consolidation, a dead cat bounce, and building cause for a technical breakdown.

The euro could be heading a lot higher.

The dollar is starting to impact commodity prices.

The downside target for the world’s reserve currency.

The Moment Of Truth For The U.S. Dollar

A
Summary

The fall since January.

Consolidation, a dead cat bounce, and building cause for a technical breakdown.

The euro could be heading a lot higher.

The dollar is starting to impact commodity prices.

The downside target for the world’s reserve currency.

US Dollar Index depressed near 92.50
By Pablo Piovano
The US Dollar Index – which tracks the greenback vs. its main rivals – remains under pressure at the beginning of the week, now trading in the 92.40 area, near YTD lows.

US Dollar offered post-Yellen

The index has managed to rebound from fresh yearly lows near 92.30 recorded at the very beginning of the Asian session today, although it remains fragile following the innocuous speech by Chief J.Yellen at the Jackson Hole Symposium on Friday.

Expectations of a Fed’s move on rates later in the year appear to be declining among investors, hurting both DXY and yields in the US money markets. In fact, yields of the US 10-year reference are now attempting a rebound above the 2.17% level after bottoming out near 2.16% on Friday.

In addition, another round of the Trump-NAFTA conflict seems to have buried any optimism regarding the future of the tax reform and extra fiscal stimulus via infrastructure spending, all weighing on the buck and keeping USD-bulls at bay.

Data wise today, wholesale inventories, July’s goods trade balance and the Dallas Fed manufacturing index are all due later in the NA session.

US Dollar relevant levels

As of writing the index is losing 0.01% at 92.51 and a breakdown of 92.31 (2017 low Aug.28) would open the door to 91.91 (2016 low May 3) and then 91.51 (low Jan.15 2015). On the flip side, the next up barrier aligns at 93.25 (10-day sma) followed by 93.44 (high Aug.25) and finally 94.14 (high Aug.16).

US Dollar Index depressed near 92.50
By Pablo Piovano
The US Dollar Index – which tracks the greenback vs. its main rivals – remains under pressure at the beginning of the week, now trading in the 92.40 area, near YTD lows.

US Dollar offered post-Yellen

The index has managed to rebound from fresh yearly lows near 92.30 recorded at the very beginning of the Asian session today, although it remains fragile following the innocuous speech by Chief J.Yellen at the Jackson Hole Symposium on Friday.

Expectations of a Fed’s move on rates later in the year appear to be declining among investors, hurting both DXY and yields in the US money markets. In fact, yields of the US 10-year reference are now attempting a rebound above the 2.17% level after bottoming out near 2.16% on Friday.

In addition, another round of the Trump-NAFTA conflict seems to have buried any optimism regarding the future of the tax reform and extra fiscal stimulus via infrastructure spending, all weighing on the buck and keeping USD-bulls at bay.

Data wise today, wholesale inventories, July’s goods trade balance and the Dallas Fed manufacturing index are all due later in the NA session.

US Dollar relevant levels

As of writing the index is losing 0.01% at 92.51 and a breakdown of 92.31 (2017 low Aug.28) would open the door to 91.91 (2016 low May 3) and then 91.51 (low Jan.15 2015). On the flip side, the next up barrier aligns at 93.25 (10-day sma) followed by 93.44 (high Aug.25) and finally 94.14 (high Aug.16).

US Dollar Index depressed near 92.50
By Pablo Piovano
The US Dollar Index – which tracks the greenback vs. its main rivals – remains under pressure at the beginning of the week, now trading in the 92.40 area, near YTD lows.

US Dollar offered post-Yellen

The index has managed to rebound from fresh yearly lows near 92.30 recorded at the very beginning of the Asian session today, although it remains fragile following the innocuous speech by Chief J.Yellen at the Jackson Hole Symposium on Friday.

Expectations of a Fed’s move on rates later in the year appear to be declining among investors, hurting both DXY and yields in the US money markets. In fact, yields of the US 10-year reference are now attempting a rebound above the 2.17% level after bottoming out near 2.16% on Friday.

In addition, another round of the Trump-NAFTA conflict seems to have buried any optimism regarding the future of the tax reform and extra fiscal stimulus via infrastructure spending, all weighing on the buck and keeping USD-bulls at bay.

Data wise today, wholesale inventories, July’s goods trade balance and the Dallas Fed manufacturing index are all due later in the NA session.

US Dollar relevant levels

As of writing the index is losing 0.01% at 92.51 and a breakdown of 92.31 (2017 low Aug.28) would open the door to 91.91 (2016 low May 3) and then 91.51 (low Jan.15 2015). On the flip side, the next up barrier aligns at 93.25 (10-day sma) followed by 93.44 (high Aug.25) and finally 94.14 (high Aug.16).

China claims victory over India in Himalayan border row
16 minutes ago
From the section Asia Share this with Facebook Share this with Twitter Share this with Messenger Share this with Email Share
Indian soldier along China borderImage copyrightAFP
Image caption
An Indian soldier on the China border - Beijing has reiterated what it says is its right to territory
China says India has withdrawn troops from a disputed Himalayan border area, ending a tense stand-off lasting weeks.
The foreign ministry in Beijing said it was pleased that "trespassing Indian personnel have all pulled back to the Indian side of the boundary".
India's foreign ministry confirmed troops were "disengaging" at Doklam after agreement between the countries.
The row began in mid-June when India said it opposed a Chinese attempt to extend a border road on the plateau.
The area is known as Doklam in India and Donglang in China.

China claims victory over India in Himalayan border row
16 minutes ago
From the section Asia Share this with Facebook Share this with Twitter Share this with Messenger Share this with Email Share
Indian soldier along China borderImage copyrightAFP
Image caption
An Indian soldier on the China border - Beijing has reiterated what it says is its right to territory
China says India has withdrawn troops from a disputed Himalayan border area, ending a tense stand-off lasting weeks.
The foreign ministry in Beijing said it was pleased that "trespassing Indian personnel have all pulled back to the Indian side of the boundary".
India's foreign ministry confirmed troops were "disengaging" at Doklam after agreement between the countries.
The row began in mid-June when India said it opposed a Chinese attempt to extend a border road on the plateau.
The area is known as Doklam in India and Donglang in China.

A combination of events put pressure on the U.S. Dollar last week, culminating with speeches by Fed Chair Janet Yellen and European Central Bank President Mario Draghi on Friday.
September U.S. Dollar Index futures settled the week at 92.677, down -0.682 or -0.73%.

U.S. Dollar Index
Weekly September U.S. Dollar Index
More
The week started with the dollar under pressure amid geopolitical tension in North Korea, as investors braced for the annual central bankers’ symposium at Jackson Hole, Wyoming. South Korean and U.S. forces began computer-simulated military exercises on Monday in the wake of North Korea’s weapons programs, angering the Asian communist regime. North Korea denounced the exercises as preparations for a nuclear war.
The dollar bounced higher about mid-week after the Euro was pressured by a weaker-than-expected reading on German investor confidence. Position-squaring ahead of the Jackson Hole symposium also supported the dollar.
The Greenback was also pressured during the week after U.S. President Donald Trump suggested a shutdown of the government was possible and threatened to terminate the North American Free Trade Agreement.
The U.S. Dollar was supported late in the week on increased speculation Republicans and Trump were getting closer to announcing their tax reform plan. President Trump’s chief economic advisor Gary Cohn said the President will start publicly campaigning for highly-anticipated tax reform next week. Cohn told the Financial Times that Trump will begin calling for long-awaited reform next Wednesday when he visits Missouri.
Finally, the week ended with the dollar index plunging in reaction to a surge in the Euro. The EUR/USD rallied to a two-year high after European Central Bank President Mario Draghi mentioned nothing about concerns over a high-priced Euro. Dovish comments from Fed Chair Janet Yellen also contributed to the dollar’s weakness.

A combination of events put pressure on the U.S. Dollar last week, culminating with speeches by Fed Chair Janet Yellen and European Central Bank President Mario Draghi on Friday.
September U.S. Dollar Index futures settled the week at 92.677, down -0.682 or -0.73%.

U.S. Dollar Index
Weekly September U.S. Dollar Index
More
The week started with the dollar under pressure amid geopolitical tension in North Korea, as investors braced for the annual central bankers’ symposium at Jackson Hole, Wyoming. South Korean and U.S. forces began computer-simulated military exercises on Monday in the wake of North Korea’s weapons programs, angering the Asian communist regime. North Korea denounced the exercises as preparations for a nuclear war.
The dollar bounced higher about mid-week after the Euro was pressured by a weaker-than-expected reading on German investor confidence. Position-squaring ahead of the Jackson Hole symposium also supported the dollar.
The Greenback was also pressured during the week after U.S. President Donald Trump suggested a shutdown of the government was possible and threatened to terminate the North American Free Trade Agreement.
The U.S. Dollar was supported late in the week on increased speculation Republicans and Trump were getting closer to announcing their tax reform plan. President Trump’s chief economic advisor Gary Cohn said the President will start publicly campaigning for highly-anticipated tax reform next week. Cohn told the Financial Times that Trump will begin calling for long-awaited reform next Wednesday when he visits Missouri.
Finally, the week ended with the dollar index plunging in reaction to a surge in the Euro. The EUR/USD rallied to a two-year high after European Central Bank President Mario Draghi mentioned nothing about concerns over a high-priced Euro. Dovish comments from Fed Chair Janet Yellen also contributed to the dollar’s weakness.

A dealer said US Federal Reserve Chair Janet Yellen’s speech at the Jackson Hole Economic Policy Symposium last week did not provide any clue on the US’s monetary policy outlook.

Meanwhile, it was reported that Hurricane Harvey, which hit southeast Texas, would likely pressure the US dollar further, as damage from the storm may threaten the US economy. Texas's Gulf Coast is home to key oil and gas facilities that make up nearly a third of the US's refinery capability.

A dealer said US Federal Reserve Chair Janet Yellen’s speech at the Jackson Hole Economic Policy Symposium last week did not provide any clue on the US’s monetary policy outlook.

Meanwhile, it was reported that Hurricane Harvey, which hit southeast Texas, would likely pressure the US dollar further, as damage from the storm may threaten the US economy. Texas's Gulf Coast is home to key oil and gas facilities that make up nearly a third of the US's refinery capability.

At 0635 AEST on Monday, the Australian dollar was worth 79.24 US cents, up from 79.04 US cents on Friday. Westpac’s Imre Speizer said the US dollar, along with bond yields fell following the annual central bankers meeting.
“The eagerly awaited Jackson Hole speeches from (Federal Reserve chair Janet) Yellen and (European Central Bank president Mario) Draghi contained little on monetary policy, disappointing those looking for clues on outlook. The US dollar and bond yields fell,” he said in a Monday morning note.
“The US dollar index closed down 0.6 per cent on the day, to the lowest level since May 2016.” On Monday the Australian dollar would likely stay within the 78.65 to 79.65 US cent range “with a slight upward bias”.
The local currency is lower against the yen and the euro.

At 0635 AEST on Monday, the Australian dollar was worth 79.24 US cents, up from 79.04 US cents on Friday. Westpac’s Imre Speizer said the US dollar, along with bond yields fell following the annual central bankers meeting.
“The eagerly awaited Jackson Hole speeches from (Federal Reserve chair Janet) Yellen and (European Central Bank president Mario) Draghi contained little on monetary policy, disappointing those looking for clues on outlook. The US dollar and bond yields fell,” he said in a Monday morning note.
“The US dollar index closed down 0.6 per cent on the day, to the lowest level since May 2016.” On Monday the Australian dollar would likely stay within the 78.65 to 79.65 US cent range “with a slight upward bias”.
The local currency is lower against the yen and the euro.

Us dollar index fall to 92.52

Us dollar index fall to 92.78.

Currencies will depreciate
Geopolitical strains could also weaken the Korean won (Exchange: KRW=) and the Taiwan dollar (Exchange: TWD=).
Financial markets in those countries have a large number of foreign equity investors, and those traders tend to sell shares in the wake of political tensions, explained Khoon Goh, head of Asia research at Australian bank ANZ.
When those stock markets take a beating, so do their currencies. If that's the case, Goh predicts the won will fall to 1180 per dollar from 1130 presently, and the Taiwan dollar to hit 31.6 from current levels of 30.2.
But the safe-haven Japanese yen (CME:Index and Options Market: ZJP*) would likely benefit amid the overall risk-averse mood, Goh added.

The U.S. dollar weakened on Wednesday as investors reduced exposure in higher-yielding assets after U.S. President Trump’s threat of a government shutdown and comments about the possible termination of a North American trade agreement.
In a speech In Phoenix, Arizona, late Tuesday, Trump warned he might terminate the NAFTA trade treaty with Mexico and Canada after a three-day conference failed to settle deep differences. He also stated that he may shut down the government if he does not get funding for a wall on the U.S. –Mexico border.

Trading conditions were thin as investors awaited speeches from Fed Chair Janet Yellen and European Central Bank President Mario Draghi on Friday in Jackson Hole, Wyoming. Therefore, the market may have over-reacted to Trump’s comments. No one can be certain whether Trump was trying to publicly negotiate changes to the current treaty, or if he was actually serious about ending NAFTA completely.
Forex
Investors didn’t waste time trying to determine whether Trump’s comments were a negotiation ploy or a real threat. They moved money into the Japanese Yen for protection. This move weighed on the U.S. Dollar.
The EUR/USD also rose after the release of strong German and French PMI survey readings.
Essentially, the dollar remained under pressure because the buying was too thin to mount an intraday counter-trend move.
U.S. Economic News
Disappointing U.S. economic data also pressured the U.S. Dollar. Flash Manufacturing PMI came in below expectations at 52.5. Analysts were looking for a reading of 53.4. Flash Services PMI data, however, exceeded expectations. New Home Sales were ugly, coming in at 571K, well below the 611K forecast.
In other news, Dallas Federal Reserve President Robert Kaplan said on Wednesday that high levels of debt in the United States represent an impediment to future growth.
During a Q&A session at the Permian Basis Petroleum Association Membership luncheon in Midland, Texas, the FOMC member also said he wants to be patient and wait for more data before raising argument for removing some monetary accommodation from the economy.

The U.S. dollar weakened on Wednesday as investors reduced exposure in higher-yielding assets after U.S. President Trump’s threat of a government shutdown and comments about the possible termination of a North American trade agreement.
In a speech In Phoenix, Arizona, late Tuesday, Trump warned he might terminate the NAFTA trade treaty with Mexico and Canada after a three-day conference failed to settle deep differences. He also stated that he may shut down the government if he does not get funding for a wall on the U.S. –Mexico border.

Trading conditions were thin as investors awaited speeches from Fed Chair Janet Yellen and European Central Bank President Mario Draghi on Friday in Jackson Hole, Wyoming. Therefore, the market may have over-reacted to Trump’s comments. No one can be certain whether Trump was trying to publicly negotiate changes to the current treaty, or if he was actually serious about ending NAFTA completely.
Forex
Investors didn’t waste time trying to determine whether Trump’s comments were a negotiation ploy or a real threat. They moved money into the Japanese Yen for protection. This move weighed on the U.S. Dollar.
The EUR/USD also rose after the release of strong German and French PMI survey readings.
Essentially, the dollar remained under pressure because the buying was too thin to mount an intraday counter-trend move.
U.S. Economic News
Disappointing U.S. economic data also pressured the U.S. Dollar. Flash Manufacturing PMI came in below expectations at 52.5. Analysts were looking for a reading of 53.4. Flash Services PMI data, however, exceeded expectations. New Home Sales were ugly, coming in at 571K, well below the 611K forecast.
In other news, Dallas Federal Reserve President Robert Kaplan said on Wednesday that high levels of debt in the United States represent an impediment to future growth.
During a Q&A session at the Permian Basis Petroleum Association Membership luncheon in Midland, Texas, the FOMC member also said he wants to be patient and wait for more data before raising argument for removing some monetary accommodation from the economy.

The U.S. dollar weakened on Wednesday as investors reduced exposure in higher-yielding assets after U.S. President Trump’s threat of a government shutdown and comments about the possible termination of a North American trade agreement.
In a speech In Phoenix, Arizona, late Tuesday, Trump warned he might terminate the NAFTA trade treaty with Mexico and Canada after a three-day conference failed to settle deep differences. He also stated that he may shut down the government if he does not get funding for a wall on the U.S. –Mexico border.

Trading conditions were thin as investors awaited speeches from Fed Chair Janet Yellen and European Central Bank President Mario Draghi on Friday in Jackson Hole, Wyoming. Therefore, the market may have over-reacted to Trump’s comments. No one can be certain whether Trump was trying to publicly negotiate changes to the current treaty, or if he was actually serious about ending NAFTA completely.
Forex
Investors didn’t waste time trying to determine whether Trump’s comments were a negotiation ploy or a real threat. They moved money into the Japanese Yen for protection. This move weighed on the U.S. Dollar.
The EUR/USD also rose after the release of strong German and French PMI survey readings.
Essentially, the dollar remained under pressure because the buying was too thin to mount an intraday counter-trend move.
U.S. Economic News
Disappointing U.S. economic data also pressured the U.S. Dollar. Flash Manufacturing PMI came in below expectations at 52.5. Analysts were looking for a reading of 53.4. Flash Services PMI data, however, exceeded expectations. New Home Sales were ugly, coming in at 571K, well below the 611K forecast.
In other news, Dallas Federal Reserve President Robert Kaplan said on Wednesday that high levels of debt in the United States represent an impediment to future growth.
During a Q&A session at the Permian Basis Petroleum Association Membership luncheon in Midland, Texas, the FOMC member also said he wants to be patient and wait for more data before raising argument for removing some monetary accommodation from the economy.

News » Business » International Business News » Malaysia's c.bank reserves rise to $100.4 bln as of Aug 15
Malaysia's c.bank reserves rise to $100.4 bln as of Aug 15

Reuters | Aug 22, 2017, 12:34 PM IST

KUALA LUMPUR, Aug 22 (Reuters) - Malaysia's gross international reserves rose to $100.4 billion as of Aug. 15, from $99.4 billion on July 31, the central bank said on Tuesday. Bank Negara Malaysia (BNM) said reserves were sufficient to finance 7.9 months of retained imports and were 1.1 times the short-term external debt. The central bank released the following international reserves data, expressed in billions of dollars: Aug 15 July 31 July 14 June 30 Total gross 100.4 99.4 99.1 98.9 international reserves Foreign currency 93.9 93.0 92.4 92.5 reserves IMF reserves position 0.8 0.8 0.8 0.8 SDRs 1.2 1.1 1.1 1.1 Gold 1.5 1.5 1.5 1.5 Other reserve assets 3.0 3.0 3.3 3.0 ($1 = 4.2800 ringgit) (Reporting by Emily Chow; Editing by Amrutha Gayathri)

BNM’s international reserves now at US$100.4 billion
Tuesday August 22, 2017
03:34 PM GMT+8

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A woman walks pass the headquarters of Bank Negara Malaysia in Kuala Lumpur, March 30, 2015. — Picture by Yusof Mat Isa
A woman walks pass the headquarters of Bank Negara Malaysia in Kuala Lumpur, March 30, 2015. — Picture by Yusof Mat Isa
KUALA LUMPUR, Aug 22 — Bank Negara Malaysia’s (BNM) international reserves amounted to US$100.4 billion (RM431.0 billion) as at August 15, 2017, compared with US$99.4 billion registered as at July 31, 2017.

BNM’s international reserves now at US$100.4 billion
Tuesday August 22, 2017
03:34 PM GMT+8

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A woman walks pass the headquarters of Bank Negara Malaysia in Kuala Lumpur, March 30, 2015. — Picture by Yusof Mat Isa
A woman walks pass the headquarters of Bank Negara Malaysia in Kuala Lumpur, March 30, 2015. — Picture by Yusof Mat Isa
KUALA LUMPUR, Aug 22 — Bank Negara Malaysia’s (BNM) international reserves amounted to US$100.4 billion (RM431.0 billion) as at August 15, 2017, compared with US$99.4 billion registered as at July 31, 2017.

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