The US dollar index (DXY) is closing at the highest levels in 10 months (end of November 2022). The dollar has risen 5 of the last 6 trading days.
The biggest gainer for the USD was versus the AUD with a rise of 0.72%. The EUR (0.63%) and CHF (0.62%) were also solidly higher on the day.
The USD only fell vs the CAD (-0.08%) on the day.
The strongest to weakest of the major currencies
The EURUSD fell below the 38.2% retracement of the move up from the September 2022 low at 1.0610 yesterday and continued the momentum to the downside today. The price bottomed near the low of a swing area between 1.0484 and 1.0533. and rebounded back above the 1.0500 level into the close. In the new trading day, getting back above 1.05335 will be needed to give the dip buyers some relief, with the 1.0610 area as a potential target. Absent that (or a failure above 1.0533), would keep the sellers more in control with the next major target on the break of 1.0484 at the 50% midpoint of the move up from the Septeembber 2022 low at 1.04053.
The USDJPY was another currency pair that extended its run to the upside today. For the USDJPY, it moved above a topside trend line at 149.29 on the daily chart. The high price extended to 149.70. The pair is up for the 4th consecutive day, after bottoming at 147.323 last Thursday. The next major target comes near natural resistance at 150.00.
Helping the dollars run higher today was a further move higher in yields. At the start of the New York session, yields were lower correcting some of the sharp gains seen yesterday. However, selling in the US that market started to push the yields back to the upside. Although all sectors of the yield curve were higher, the biggest gain was in the shorter and today:
- 2-year yield 5.137%, up 6.0 basis points
- 5-year yield 4.684% up 6.0 basis points
- 10-year yield 4.609% up 5.1 basis points
- 30-year yield 4.719% up 2.3 basis points
Since the Feds meeting last Wednesday when they convinced the market that rates would be higher for longer,
- 2-year yield is near unchanged
- 10-year yield is up from 4.35% to 4.609%%
For the month of September(with2 days to go):
- 2-year yield is up 27 basis points
- 5-year yield is up 42 basis points
- 10-year yield is up 50 basis points
- 30-year yield is up 50.5 basis points
In the US stock market today, price action was up and down. The Dow Industrial Average closed lower while the S&P and NASDAQ index were marginally higher.
- Dow industrial average fel-68.61 points or -0..20% at 33550.28
- S&P index rose 0.98 points or 0.02% at 4274.52
- NASDAQ index rose 29.23 points or 0.22% at 13092.84
The S&P index hit a low of 4238.63. The 50% midpoint of the move up from the March 23 low comes in at 4207.97 while the 200-day moving averages at 4196.15. There is chatter that a test of that area might be warranted given concerns about government shutdown, higher yields, and its impact on growth.
For the trading month:
- Dow industrial average is down -3.37%
- S&P index is down -5.17%
- NASDAQ index is down -6.71%.
in other markets:
- Crude oil surged by $3.34 or 3.7% to $93.71. The high price reached $94.17 would take the price above the 50% midpoint of the move down from June 2022 high at $93.78, before rotating lower into the close
- Spot gold tumbled $-25.24 or -1.33% to $1875.19. That is the lowest level since March 2023.
- Bitcoin is trading at $26,224. At the start of the day, the price was trading at $26707.