The US dollar rose sharply in last week’s trading and today, 29.8.22, as the US dollar index, which measures the performance of the US currency against foreign currencies, jumped above 109.29, the highest level in 20 years. This rise led to a sharp decline in foreign currencies, and the euro fell by 0.9930 dollars, while the British pound fell by 1.1650 dollars, and the dollar-yen jumped by 85% in trading on Monday.
On the other hand, global stocks continued their decline, after the last trading week witnessed sharp declines in the American and European stock indices in light of the tightening policy of the Federal Reserve and the crisis facing Europe with the interruption of Russian gas and fear of a global economic slowdown.
European and American stocks closed lower, with the German DAX down 300 points, or 2.3%, while the US Dow Jones Industrial Average fell by 1000 points or 3%.
With investors increasingly concerned about an economic slowdown, US stock futures pointed to a decline of more than 1.2% this morning, while Asian stocks continued their decline, and the Japanese Nikkei lost 1.3%.
Jerome Powell, the chairman of the US Federal Reserve, spoke at the Jackson Hole symposium last week. He confirmed the Fed’s determination to fight inflation. He indicated that the US Federal Reserve is committed to the monetary tightening policy to combat inflation. In addition to talking about interest rates, he said that economic data will determine the course of raising the interest rate in September, with expectations of raising it by 50 basis points and perhaps 75 basis points in mid-September.
The US labor market data on Friday, 2.9.22 will be of very great importance to the US economy after the US economy contracted in the first half of the year or two quarters by 1.6% and 0.9%, respectively. These data will determine, to a large extent, the rate of an interest rate hike in September.
Economists’ expectations indicate that the US economy will add 295 thousand jobs in August, the lowest that was added last month, July, by 528 thousand jobs.
As for the unemployment rate, expectations indicate that it will remain unchanged at 3.5%, which is the level it was before the emergence of the Corona epidemic.