Market Drivers – US Session – Wednesday, August 24

Mohamed Abdelhamid 25 August, 2022 4:34 am Commodities, Forex Market, Market Update

Investors have an eye on digesting the latest US economic data and another eye on the signals that could be contained in Fed Chair Jerome Powell’s speech before Jackson Hole Symposium on Friday. Fed’s annual event will host global economists and policymakers to discuss a variety of topics. Market players will try to reassess their estimates on potential rate hikes across major economies, as well as the risks pertaining steeper economic paths.

The performance of the US dollar was cautious. The American currency seesawed between gains and losses, and eventually had a mixed close, but little changed across the forex board. The dollar advanced at the beginning of the day but retreated after Wall Street’s opening, as US stocks achieved modest gains.

Treasury yields were sharply higher. The 10-year note yielded as much as 3.1269%, while the 2-year note yield peaked at 3.393%. The dollar eased during US trading hours despite yields holding at the upper end of their range.

The dollar posted modest gains against its safe-haven rivals. USD/CHF stands at 0.9660 while USD/JPY trades at around 137.20.

Economic Data

US Durable Goods Orders in July stayed virtually unchanged at $273.5 billion, missing expectations of a 0.6% increase. However, the reading on Nondefense Capital Goods Orders excluding Aircraft increased by 0.4%, beating the 0.3% expected.

US Pending home sales dropped 19.9% in July compared with July 2021. This economic reading is a a measure of signed contracts on existing homes. The figure fell along eight out of the past nine months as rising mortgage rates made housing less affordable.

Other Developments

After fluctuating in a choppy trading session on Wednesday, West Texas Intermediate rose 1.2% to settle near $95 per barrel.

The Energy Information Administration data showed that US crude stockpiles fell amid record petroleum exports. Meanwhile, the US sent its response to the EU’s latest proposal to rescue the 2015 nuclear accord.

National Security Council spokesman John Kirby said that while a deal is closer than ever before, “Gaps remain. We’re not there yet.”

The EUR/USD pair settled around 0.9960, little changed for a second consecutive day. GBP/USD trades just below the 1.1800 threshold. The AUD/USD trades at around 0.6900, down for the day, while USD/CAD trades at 1.2965.

Spot gold stands at around $1,750 a troy ounce while crude oil prices extended their advance, with WTI now trading at around $95 a barrel.

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