Marketwatch North America

Daily Insights
August 23, 2023

The U.S. Dollar Index finally leapfrogged resistance at 103.60 after several previous failed attempts during August. The DXY is +0.39% today at 103.968 with traders now looking to re-test May’s high at 104.699. From a technical standpoint the dollar remains in a long-term downtrend if the DXY closes the month below 104.75. But 6 consecutive weekly gains are testing the short USD models.

The dollar is higher against 9/10 of the G10 pairs, the one exception being a 0.30% decline vs. JPY. USD/JPY is in its 8th day of rangebound trading, capped by a 146.56 high and 144.92 low.

Widening the dollar’s performance against the broader basket of majors hints at improving risk sentiment: ZAR +0.71%, MXN +0.22% and BRL +0.10%. USD/MXN is in its 5th consecutive daily decline following the candlestick star formation on Aug 16th, -1.59% over that time.

U.S. Treasury yields are lower with the benchmark 10-year yield currently 4.262%, reversing the previous 3 days’ worth of gains. Despite the lower yields, Fed Funds Futures are still implying a 32% probability of a 25-basis point hike at the Fed’s November meeting, and a less probable hike (12%) at the September meeting.

North American equity index futures are signaling a higher open today. The major European and Asian indexes are a mix of minor gains and losses.

The price of oil has gapped lower (today’s opening price was below yesterday’s low), and at $78.12/barrel is the lowest price since July 24th. Support is at $77/barrel. Gasoline prices have followed oil lower, -1.75% and the lowest since August 3rd. Hopefully prices at the pump will adjust just as quickly. Crude oil is -2.87% YTD while Gasoline is +11.34% YTD.

A steady stream of eight scheduled interviews and speeches by Fed officials begins tomorrow and continues through Friday as part of the Fed’s annual Jackson Hole Economic Symposium. The highlight will be Fed Chairman Powell’s speech tomorrow at 10:05am ET.

Economic Calendar

CAD - Core Retail Sales m/m
JPY - Flash Manufacturing PMI
CAD - Retail Sales m/m
USD - Flash Manufacturing PMI
EUR - French Flash Manufacturing PMI
EUR - French Flash Services PMI
USD - Flash Services PMI
USD - New Home Sales
EUR - German Flash Manufacturing PMI
EUR - German Flash Services PMI
EUR - Flash Manufacturing PMI
EUR - Flash Services PMI
All - BRICS Summit
GBP - Flash Manufacturing PMI
GBP - Flash Services PMI
EUR - Consumer Confidence
USD - Crude Oil Inventories

Market Indicators

Currency Pairs
Pair High Low
usd/jpy 145.813 145.243
eur/usd 1.08714 1.08023
gbp/usd 1.27646 1.26144
aud/usd 0.64515 0.64108
usd/cad 1.35972 1.35323
eur/gbp 0.85656 0.84924
usd/mxn 16.9123 16.8543
Equities and Commodities
S&P 500 4398.85
NASDAQ 14970.2
DOW 34327.4
GOLD 1906.29
SILVER 23.92

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.