Dollar Softer After Yesterday’s Fed Rate Hike
July 27, 2023
The dollar in overnight trading lost 0.6-0.7% against the New Zealand and Australian currencies, 0.5% versus the euro and Swiss franc, 0.4% relative to the Turkish lira and 0.2% vis-a-vis the Canadian dollar. Prices for Bitcoin and WTI oil are up 0.5% and 1.0%. U.S. stock futures have strengthened, and 10-year sovereign debt yields are a basis point lower in the U.S., Great Britain and Japan and 2 basis points lower in Germany. European and Asian equities are mostly higher, too.
Investors are awaiting a bunch of U.S. data to be reported today as well as the European Central Bank’s policy announcement today and the Bank of Japan’s tomorrow. The ECB is expected to match the Fed’s 25-basis point rate hike, while the Bank of Japan is once again expected to leave policy unchanged.
In July, Italian consumer confidence fell back more than expected to a 2-month low, but manufacturing business confidence bounced off of June’s 6-month low to a 3-month high.
German consumer confidence heading into August improved to an 18-month high but remained well below the zero neutral level at -25.2.
Swedish consumer confidence rose half an index point to a 13-month high in July, but business sentiment dropped a full point to a 2-month low. Finnish consumer confidence matched the May and June results, but factory sector confidence in Finland weakened to a 35-month low.
Austria’s manufacturing purchasing managers index printed below 40 for a third straight month and, at 38.8, reflected the fastest drop in activity in 39 months.
Although Spanish retail sales recorded their smallest monthly increase in four months, the 6.4% year-on-year rise in June was the most in 3 months. Spain’s jobless rate of 11.6% last quarter was down from 12.5% in 2Q 2022 and its lowest reading since 2008.
Great Britain’s monthly distributive trades index sank to a 15-month low of -25 in July from -9 in June and -10 in May.
South African producer price inflation declined to 4.8% last month from 7.3% in May and a record high 18.0% in July 2022.
Between the second quarters of 2022 and 2023, Australian export prices plunged 11.2%, while import prices slipped 0.3%.
Malaysian producer prices recorded their largest on-year drop (4.8%) in 38 months in June.
Chinese corporate profits in the first half of 2023 were 16.8% lower than a year before. That compares to a 4% on-year slide in full-2022. Hopes remain high that Beijing officials will be unveiling more fiscal stimulus very soon.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British distributive trade index, China corporate profits, German consumer confidence, Italian business and consumer sentiment
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