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US Dollar Index Eases as Profit-Taking Occurs Amid Sliding Yields
Confirmed
In Short: The US Dollar Index has retreated slightly from its late July highs, with bond yields easing due to profit-taking and a focus on inflation by the US Federal Reserve.
Government bond yields have been rising globally for months, driven by concerns over inflation from the oil price surge since the start of the US-Israel war with Iran, according to reports. Higher interest rates and inflation tend to drive up bond yields, reflecting less confidence in a given government, and competition from AI firms is also driving up yields, as noted by financial news outlets.
The US Dollar Index (DXY), which tracks the US dollar against a basket of currencies, has slightly eased after hitting a fresh high since late July, but remains above the 100.00 psychological mark. The retreat is partly due to the US Federal Reserve Chair Kevin Warsh’s focus on inflation, which has calmed the recent selloff in the fixed-income market, prompting some profit-taking in the US dollar, as reported by FXStreet.
Homebuyer affordability improved in July, with the national median payment applied for by purchase applicants decreasing to $2,175 from $2,191 in June, according to the Mortgage Bankers Association's (MBA) Purchase Applications Payment Index (PAPI). The typical mortgage payment also improved on an annual basis, as earnings growth continued to outpace the increase in mortgage payments, as stated by Edward Seiler, MBA’s Associate Vice President of Housing Economics.
Canada’s August Consumer Price Index figures will be closely watched when released on Monday, while the US Dollar Index has rebounded from the 0.5 Support Arc within the current Arc Cycle, according to FXStreet.
What's confirmed
- Government bond yields have been rising globally for months, driven by concerns over inflation from the oil price surge since the start of the US-Israel war with Iran, according to reports. Higher interest rates and inflation tend to drive up bond yields, reflecting less confidence in a given government, and competition from AI firms is also driving up yields, as noted by financial news outlets.
- The US Dollar Index (DXY), which tracks the US dollar against a basket of currencies, has slightly eased after hitting a fresh high since late July, but remains above the 100.00 psychological mark. The retreat is partly due to the US Federal Reserve Chair Kevin Warsh’s focus on inflation, which has calmed the recent selloff in the fixed-income market, prompting some profit-taking in the US dollar, as reported by FXStreet.
- Homebuyer affordability improved in July, with the national median payment applied for by purchase applicants decreasing to $2,175 from $2,191 in June, according to the Mortgage Bankers Association's (MBA) Purchase Applications Payment Index (PAPI). The typical mortgage payment also improved on an annual basis, as earnings growth continued to outpace the increase in mortgage payments, as stated by Edward Seiler, MBA’s Associate Vice President of Housing Economics.
- Canada’s August Consumer Price Index figures will be closely watched when released on Monday, while the US Dollar Index has rebounded from the 0.5 Support Arc within the current Arc Cycle, according to FXStreet.
What's still developing
- The index, however, holds above the 100.00 psychological mark heading into the European session.