The dollar index rose by 0.82% on Monday, primarily due to increased T-note yields and a decline in stock prices that heightened liquidity demand for the currency. This uptick followed the better-than-expected U.S. July new home sales report, which showed sales at 652,000, slightly down from June’s 656,000 but exceeding the forecast of 630,000.
Conversely, the euro fell by 0.95% amid dollar strength and ongoing concerns regarding the end of the Russian-Ukrainian war, despite Germany’s August IFO business climate index rising to a 16-month high of 89.0. On the geopolitical front, Russian Foreign Minister Lavrov stated that no meeting between Russia and Ukraine’s leaders is planned without a preliminary agenda.
The Japanese yen weakened against the dollar by 0.62%, pressured by rising U.S. Treasury yields and a downward revision of Japan’s June leading index from 106.1 to 105.6. Despite this, hawkish comments from Bank of Japan Governor Ueda suggested expectations for a tight labor market, potentially leading to future upward pressure on wages.
