US dollar trades sideways as markets examine China’s stimulus package.
The US dollar (USD) is trading mixed on Tuesday after the Chinese government announced efforts to revive its underperforming economy. The primary components of the strategy are the 500 billion Yuan (CNY) cash injection and the liquidity line with the People’s Bank of China (PBoC), which allows funds and brokers to draw cash for stock purchases. This prompted the Chinese Yuan (CNY) to surge by almost 0.50% against the greenback during Tuesday’s Asian trading session.
On the economic data front, the calendar is rather quiet, with some second-tier statistics due on Tuesday. Aside from Federal Reserve Governor Michelle Bowman’s comments on the US economic outlook and monetary policy, the Richmond Fed Manufacturing Index for September may be the most market-moving.
Daily Market movers: US dollar is trading calmly on Tuesday, as Asian equities markets rose in response to China’s stimulus plans.
On the geopolitical front, the United Nations has convened an emergency meeting for Lebanon on Tuesday following Israel’s heavy bombing over the weekend and Monday.
This Tuesday will begin with a statement by Federal Reserve Governor Michelle Bowman discussing the US economic outlook and monetary policy at the Kentucky Bankers Association Annual Convention. Comments are likely to arrive about 13:00 GMT.
At the same time, the Housing Price Index for July is likely to be published. A positive 0.2% projected following a slight 0.1% contraction in June.
The Richmond Fed Manufacturing Index for September will be issue at 14:00 GMT, and it predicted to rise slightly to -17 from -19 in August.
At the same time, the Consumer Confidence reading predicted to reach 104.0, up from 103.3 earlier.
Equity markets are booming, with the Chinese Hang Seng and Shanghai Shenzhen Index up more than 4% at the closing on Tuesday.
Equity markets are booming, with the Chinese Hang Seng and Shanghai Shenzhen Index up more than 4% at the closing on Tuesday. European and American shares are following suit, with lesser rises.
The CME FedWatch Tool displays a There is a 48.5% possibility of a 25-basis-point rate decrease at the next Fed meeting on November 7, with 51.5% expecting another 50-basis-point cut.
The US 10-year benchmark rate is trading at 3.79%, close to a new September high.
