During the last few hours, the exchange value of the US dollar (USD) changed its trading trend and also its point status, according to the dollar index DXY (US Dollar Currency Index), which compares the value of the USD with another six major world currencies. During yesterday’s trading day, 8/28/2023, the daily point value was lower by -0.2% points, and during today’s European morning, 8/29/2023, the DXY index reached USD 103.85 points. However, a few hours later already during Tuesday’s European almost noon on 29/08/2023, at approximately 11:23, the value of the DXY index was 104.08 USD points with a daily growth of + 0.02% of the point value.
However, the US dollar (USD) has not strengthened against the single European currency, the euro (EUR), so far on Tuesday 29/08/2023, while yesterday on 28/08/2023 this currency pair EUR/USD traded at around 8:18 CET in a mutual exchange rate of in the amount of 1.082 USD per EUR with the daily strengthening of the EUR by + 0.16% against the USD. Currently, during the European day of Tuesday 29/08/2023, around 11:31 CET, this global currency pair EUR/USD was trading at a mutual rate of 1.081 USD per EUR, with the EUR down by -0.09% against the USD for the day so far. However, according to economic correspondents in connection with analysts of brokerage companies and financial strategists of the foreign exchange market, the position of the American dollar (USD) is currently uncertain from the point of view of investors, traders and possibly other participants in the financial markets, because this week, which is marked in this year’s calendar as 35 .in order will be marked by the withdrawal and conclusion of so-called big bets connected with a whole range of economic data, including data from the US labor market at the end of this week.
But still, on average, the DXY (US Dollar Currency Index) is up about 2% points so far this August 2023 as resilient economic data has supported expectations that interest rates may stay higher for longer. This opinion gained strength after on Friday, 25/08/2023, the chairman of the central bank of the US Federal Reserve System (FED), Mr. Jerome Powell, as part of his speech at the traditional economic symposium in Jackson Hole, indicated that it may be necessary to cool the still too high inflation another rate hike, although his promise to proceed with caution in the coming sessions provided some uncertainty to financial markets. With the U.S. central bank stressing that the trajectory of interest rates will be heavily data-driven, the focus will be on a range of economic indicators this week, including wages and personal consumption expenditures, economic reporters said. Thus, primarily for the decision-making of investors and other participants in the financial market, the number of vacant jobs for July 2023 will be the first in line.
Economists polled by Reuters expect total vacancies in the US to increase to a total of 9.465 million, which, however, signals a slight decrease compared to June 2023. As a currency strategist at the Commonwealth Bank of Australia, financial strategist Ms. Carol Kong said the stronger-than-expected jobs data could raise market prices for further US Fed rate hikes and push the USD exchange rate higher again. Markets are pricing in a 78% chance that the FOMC Fed will address interest rates next month, and CME’s FedWatch tool showed that the odds of a hike at the FOMC Fed meeting are now at 62%, compared to 42% a week ago previously. “Our base case is that the Fed has completed its tightening cycle and will begin its easing cycle in March 2024,” said CBA’s Ms. Kong. “But Powell’s hawkish comments in Jackson Hole suggest risks are skewed toward more tightening and a later start to the easing cycle,” the financial expert added.