US Dollar Strengthens as Economic Outlook Dims
Forex Update for Week 35
DERBYSHIRE GB / 2023, Week Number 35 - Charts revised, sentiment post Jackson Hole risk off although impacted by holidays. Next update after the US Consumer Confidence and Jolts report on Tuesday, August 29th.
US DOLLAR
The US economy, when analysed, suggests a negative outlook due to the projected upcoming deterioration in GDP and interest rates that are expected to be higher for longer.
Intermarket analysis aligns with the negative macroeconomic outlook suggesting that sentiment may be bearish.
US Dollar Index (DXY) has gained 4.2% since July after it had fallen 4.0% in the two months prior.
S&P 500 has declined 4.6% since July after it had gained 27.8% in the nine months prior.
Six month Treasury yields have gained 0.88% since March after it had declined 0.44% in the one month prior.
Euro
The EA economy, when analysed, suggests a slightly positive outlook due to the projected stabilised GDP and falling inflation although the potential for interest rates being higher for longer is a risk to this sentiment.
Intermarket analysis does not align with the slightly positive macroeconomic outlook suggesting that sentiment may be bearish.
EUR/USD has declined 3.8% since July after it had gained 4.8% in the two months prior.
DAX has declined 5.0% since July after it had gained 5.5% in the one month prior.
Six month German Bund yields have gained 4.4% since November 2021 after it had remained near 0 for many years prior.
Pound Sterling
The UK economy, when analysed, suggests a slightly positive outlook due to the projected stabilised GDP and falling inflation although the potential for interest rates being higher for longer is a risk to this sentiment.
Intermarket analysis does not align with the slightly positive macroeconomic outlook suggesting that sentiment may be bearish.
GBP/USD has declined 3.9% since July after it had gained 5.1% in the two months prior.
FTSE 100 has declined 4.6% since July after it had gained 5.1% in the one month prior.
Six month Gilt yields have gained 2.0% since October 2022 after it declined 0.6% in the one month prior.
Last Week's Events
Wednesday, August 23rd
EA PMI’s missed expectations
GB PMI’s missed expectations
US PMI’s missed expectations
Thursday, August 24th
US Unemployment Claims slightly below expectations
Day 1 of the Jackson Hole Symposium
Friday, August 25th
Day 2 of the Jackson Hole Symposium data-dependant central banks to remain on the hawkish side of monetary policy
This Week's Events
Tuesday, August 29th
US CB Consumer Confidence expected to decline
US JOLTS Job Openings expected to remain steady
Wednesday, August 30th
DE Prelim CPI expected to remain steady
US ADP Non-Farm Employment Change expected to decline
US Prelim GDP expected to remain steady
Thursday, August 31st
EA CPI Flash Estimate expected to slightly decline
US PCE Price Index expected to remain steady
US Unemployment Claims expected to remain steady
Friday, September 1st
US Average Hourly Earnings expected to slightly decline
US Non-Farm Employment Change expected to decline
US Unemployment Rate expected to remain steady
US ISM Manufacturing PMI expected to remain steady
Next Week's Events
Wednesday, September 6th
US ISM Services PMI
Thursday, September 7th
US Unemployment Claims
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