The Institute for Supply Management reported that its non-manufacturing PMI crept up to a score of 56.9 in August from 56.7 in two months, the second straight monthly improvement following three months of decreases. This news caused the dollar index (DXY) to increase by 0.557%.
The increase in services came after the ISM’s manufacturing assessment the week before, which revealed that, in opposition to certain other major economies, US factory activity increased gradually last month.
The GBP and the euro attempted to bounce back from the September 5 multi-year lows versus the greenback.
The Bank of Japan stood out at the Jackson Hole forum as the sole institution that stays determined in maintaining monetary policy flexible, according to a note from HSBC. Central bank rate increases are attracting the focus of the currency markets.
According to HSBC, the link between the dollar-yen rate and US rates has recovered to almost its highest level in 2022. The bank raised its prediction for the pair from 140 to 144 at the close of Q3.
At 142.71 yen to the dollar, the yen lost more ground, falling 1.48%. The dollar has gained 24% against the yen in 2022 to date.
The base yield on 10-year Treasury notes in the United States increased to 3.332% by 14.1 bps.
In an effort to prevent a winter expense disaster for millions of homes, Liz Truss, Britain’s next prime minister, is thinking about freezing household heating prices.
On September 9, ministers of the EU will convene to consider urgent, bloc-wide actions to address the spike in gas and electricity prices that is devastating the continent’s economy and raising consumer costs after Russia cut off gas exports to the region.
When the Reserve Bank of Australia (RBA) increased its cash rate by 50 bps but signaled it did not follow a predetermined course for prospective interest rate rises, the Australian dollar fell to a seven-week low.
The Chinese yuan recently fell in value and to a new 2-year low in overseas trade of 6.9784 despite the government’s best attempts to prevent it.
Late on September 5, the Chinese central bank reduced the RRR for foreign exchange reserves, allowing banks to liquidate more dollars.