US Dollar whipsaws in volatile session near 14-month low

September 25, 2024

NEW YORK (September 25) The US Dollar (USD) is bouncing after earlier seeing the Euro (EUR) first hit a 14-month high at 1.1214 against the US Dollar (USD). The reshuffle comes after investors relocate their investments from the US to Chinese equities. The move is triggered by a massive stimulus plan from the Chinese government that was implemented on Tuesday. 

On the economic data front, there is a very light calendar ahead, with no real market-moving data on Wednesday. One element that might draw some attention is comments from Federal Reserve (Fed) Governor Adriana Kugler, who delivers a speech about the US economic outlook at the Harvard Kennedy School in Cambridge, Massachusetts. From there, markets will be on edge over the US Q2 Gross Domestic Product (GDP) release, and Fed Chairman Jerome Powell set to speak on Thursday. 

Daily digest market movers: All eyes on Thursday

  • “Sentiment is firing up in Asian markets after China announced a raft of policy stimulus measures,” damping demand for the Dollar, said Wei Liang Chang, a foreign exchange and credit strategist at DBS Bank in Singapore, Bloomberg reports. 
  • At 11:00 GMT,  the Mortgage Bankers Association (MBA) released its weekly mortgage applications index. There was a surge of 11.0% in applications against 14.2% last week.
  • Related to mortgages, New Home Sales are due at 14:00 GMT. Expectations are for a touch softer number at 0.700 million units in August against 0.739 million previously. 
  • The US Treasury will allocate a 5-year Note around 17:00 GMT. 
  • At 20:00 GMT, Federal Reserve Governor Adriana Kugler delivers a speech about the US economic outlook at the Harvard Kennedy School in Cambridge, Massachusetts.
  • US equities try to head higher, and are posting small gains for this Wednesday.
  • The CME Fedwatch Tool shows a 41.6% chance of a 25-basis-point rate cut at the next Fed meeting on November 7, while 58.4% is pricing in another 50-basis-point rate cut. 
  • The US 10-year benchmark rate trades at 3.77%, retreating from its attempt earlier to print a fresh monthly high. 

FXStreet

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