The U.S. dollar index (DXY) dipped by -0.11% today after reaching a 2.5-week high, influenced by a decline in WTI crude prices and weaker-than-expected August ADP employment change, which increased by +38,000 against an expected +47,000. The probability of a Fed rate hike at the next FOMC meeting on September 15-16 stands at 63% following the easing inflation expectations.
Crude oil prices initially surged to a 6-week high amid heightened U.S.-Iran hostilities, but fell after U.S. Energy Secretary Wright noted that over 17 million barrels of oil passed through the Strait of Hormuz, alleviating supply concerns. Factory orders in the U.S. for July rose by +0.9% month-over-month, exceeding expectations of +0.7%.
The euro fell to a 2-week low as markets anticipate a 99% chance of a +25 basis point ECB rate hike at its upcoming meeting on September 10. In Japan, the yen rebounded after hawkish comments from BOJ Board Member Hajime Takata suggested a potential rate hike, with a 97% chance being assigned to a +25 basis point increase at the September 18 policy meeting.
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