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The US dollar rises and the People’s Bank of China cuts interest rates

The dollar index rose yesterday, Monday, 15.8.2022, while the major currencies fell against it.  On the other hand, gold fell to 1770 dollars an ounce before rebounding a little.

 Signs of a weak global economy boosted demand for the US dollar, despite weaker-than-expected US economic data.

 The Empire State Manufacturing Index fell to its lowest level since May 2020 to -31.3, weaker than expectations and the sharpest contraction in 4 years.  Also, August’s housing index fell -6 to a 4-year low.

 The People’s Bank of China cut the one-year interest rate by 10 basis points to 2.75% from 2.85%.

 US stock indices rose, erasing all the losses they had incurred at the beginning of the session and closed higher, with the Dow Jones rising 0.5%, and the Nasdaq 0.6%.  The Standard & Poor’s 500 rose 0.4%.

 Investors are looking forward this week to US retail sales figures, with expectations of a 0.2% gain in July after a 0.1% gain in June.  Economists said that this is a result of the spendings from high-income families, despite high inflation in the US and rising energy and food prices.

 The Fed meeting report will be released, and we should see a calm tone from Fed members given the signs that inflation is peaking.

 The Reserve Bank of New Zealand is expected to announce the interest rate, and economists’ expectations are to raise interest rates by 50 basis points, from 2.5% to 3%.

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