English
Dollar extends gains for second day in a row amidst heavy losses for yen
The US dollar continued to rise during Wednesday’s trading, as all asset classes began to recover clearly amid more optimistic expectations regarding the US economy and a decline in the market pricing for a potential large cut by the US Federal Reserve.
In terms of trading, the dollar index – which measures the performance of the US currency against a basket of six other major currencies – rose by 0.24% to record 103.15 points.
On the economic front, markets are witnessing a quiet day, as markets await the US 10-year Treasury bond auction late on Wednesday, which may attract more attention, and the release of the US consumer credit change data for June.
On another note, the US dollar benefited today from the decline in the Japanese yen due to the pessimistic statements made by the Deputy Governor of the Bank of Japan, Shinichi Uchida, this morning, after he stated that the severe effects that may result from the recent fluctuations in the markets may affect the Bank of Japan's decision on interest rates, and this pushed the dollar to rise by 1.9% against the Japanese yen.
The Mortgage Bankers Association in the United States issued this morning the weekly mortgage applications data, which came out very positive as the number of mortgage applications rose last week by about 6.9%, after it had witnessed a contraction during the week by about 3.9%.
This came at a time when the CME Fedwatch tool showed a decrease in the market pricing of the possibility of a 50 basis point interest rate cut by the Federal Reserve from 98% yesterday to 63.5% today at its next meeting in September.
The demand for the dollar also increased today, with the demand for US Treasury bond yields rising, with the interest rate on the benchmark 10-year US Treasury bond trading at 3.90%, after rising by about 1.5% today.
