Tuesday Briefing: From DXY to Latest FX Headlines; Aug 16, 2022

US Dollar Index Overview

  • The DXY hits highest level since July 28, 2022 and touches 106.94 mark.
  • It made intraday high at 106.94 and low at 106.45 mark.
  • A day Chart and H1 chart with triple EMA suggest bullish trend for the time being.
  • Immediate hurdles are seen at 107.00 to 106.40 mark.
  • A sustained close of either side on H1 chart requires for the further directions of the U.S. dollar.

Key Headlines for the FX market:

  • U.S. stock index futures inched lower on Tuesday as investors assessed results from retailers Walmart and Home Depot, while signs of a slowing global economy continued to keep investors on edge.
  • European stocks crept sluggishly higher on Tuesday as investors sought safety in defensive names, while risk aversion likewise lifted the safe haven dollar following weak Chinese and U.S. economic data that stoked fears of a global recession.
  • South Korea agreed on Tuesday to expand its global health partnership with the foundation set up by Microsoft Corp co-founder and philanthropist Bill Gates.
  • Taiwan accused China of exaggeration after the Chinese military published footage of the strategically located Penghu islands, where there is a major Taiwanese air base, saying it was not true Chinese forces had come near the islands.
  • Australia’s Prime Minister Anthony Albanese said his predecessor Scott Morrison had “undermined our democracy” by secretly appointing himself minister for home affairs and treasury during the COVID pandemic, in addition to the health, finance and resources portfolios previously revealed.
  • The two candidates battling to be Britain’s next prime minister will vie to present themselves as defenders of Scotland’s place in the United Kingdom today by promising more scrutiny of Scotland’s government to undermine a new push for independence.
  • The U.S. Federal Reserve is hiking interest rates at the most aggressive pace in a generation, but the financial conditions it needs to tighten to tame soaring inflation have loosened significantly. Stocks will need to fall and bond yields rise to correct the move, strategists warn.
  • Losses arising from cryptocurrency hacks jumped nearly 60% in the first seven months of the year to $1.9 billion, propelled by a surge in funds stolen from decentralized finance (DeFi) protocols, according to a blog post from blockchain analysis firm Chainalysis released on Tuesday.
  • China slashed holdings of U.S. Treasuries for a seventh consecutive month in June, Treasury department data released on Monday showed, with investors closely tracking this measure in the wake of tensions between the world’s two largest economies involving Taiwan.
  • India’s wholesale inflation rose 13.93% in July from a year earlier, helped by a lower increase in food prices, but it stayed in double digits for a 16th month, amid expectations that the central bank will again raise policy rates next month.
  • China will boost economic demand in a strong, reasonable and moderate manner and accelerate infrastructure construction in the third quarter of the year, officials from the state planner said on Tuesday.
  • China will step up macro-economic policy support for the economy, state media quoted Premier Li Keqiang as saying on Tuesday, after data showed growth unexpectedly slowed last month.

Latest updates on Russia – Ukraine Conflicts:

  • Explosions rocked an ammunition depot and disrupted trains in Russian-annexed Crimea, the latest such incident in a region Moscow uses as a supply line for its war in Ukraine.
  • Russia has “no need” to use nuclear weapons in Ukraine, its defense minister said, describing media speculation that Moscow might deploy nuclear or chemical weapons as “absolute lies”.

Source: Reuters

Keep an eye open for the latest news and fundamentals affecting the FX markets.

Take a look and do trade wisely!
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