US dollar higher. Crude oil prices higher. Stocks mix. Interest rates still lower.
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The USD is extending gains and is the strongest of the major currencies. The GBP and the EUR are the weakest.
The EURUSD is breaking below the lower extreme that confined the pair in July and into August at 1.0096. The low swing area between 1.0096 and 1.0121 is now risk stay below keeps the bears more in control.
The GBPUSD is also making new lows and in the process is moving below the swing low from June at 1.1933. In July, the price trade above and below that level with a low for the year at 1.1759. The low price just reached 1.19218. The price is running away from the 1.2000 natural support level.
GBPUSD falls below June lows
The USDJPY is trading at the highest level since July 28, moving above a swing area between 135.29 and 135.575. That area is now close risk. Stay above is more bullish. The pair is testing the 61.8% retracement of the move down from the July 14 high at 135.945.
USDJPY moves to a new high going back to July 28
While the USD is moving higher, rates remain negative but off their low levels for the day.
- 2 year yield 3.235%, -5.2 basis points
- 5 year 3.034%, -1.7 basis points
- 10 year 2.84%, -1.6 basis points
- 30 year 3.138%, -1.7 basis points
Admittedly, rates are off there lows for the day, but still negative. Fed’s George and Bullard are speaking more hawkish only about inflation. Bullard has been the most hawkish of all Fed officials is looking for 3.75% – 4% Fed target by the end of the year. The current rate is only 2.5%. So he sees 150 basis points more by the end of the year. There are 3 more meetings in 2022.
The US stocks remain mixed with the Dow down -0.24%. The broader S&P is up 0.12% and the Nasdaq is up 0.29%.
There is a 57% chance for 75 basis points at the September meeting.
Fed’s Kashkari is scheduled to speak shortly.