The U.S. dollar index (DXY) fell -0.14% on Tuesday, ending a month-long high, attributed to a surprising drop in the July consumer confidence index to 90.8, down -1.4 points from June, versus expectations of an increase. Additionally, WTI crude oil prices fell -4%, impacting inflation expectations and contributing to the dollar’s decline.
The May S&P Composite-20 home price index showed a +1.6% year-over-year increase, surpassing expectations of +1.3%. The Richmond Fed manufacturing survey rose by +1 to 5, though below the anticipated 6. The market is currently pricing in a 32% chance of a +25 basis point rate hike during the ongoing FOMC meeting.
The euro (EUR/USD) recovered, gaining +0.17%, supported by a stronger-than-expected July consumer confidence survey from France, which rose to a 4-month high at 86. Meanwhile, the Japanese yen (USD/JPY) traded just above a 39-year low, pressured by fiscal concerns; markets are only discounting a 4% chance of a rate hike by the Bank of Japan in its upcoming meeting. Precious metals like gold and silver fell sharply due to reduced safe-haven demand amid easing geopolitical tensions.
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