The US dollar rose sharply in Monday’s transactions, 5.9.2022, after the jobs report on Friday, 2.9.2022. While stocks, currencies and gold fell.
The green currency recorded strong gains last week, and rose for the fourth consecutive month, and its dollar index jumped above 110.0 as it rose above 109.29, the highest level since 2002.
Global stocks fell sharply, as the US S&P 500 index fell to its lowest level in six weeks. While the Nasdaq has fallen more than 20% since the beginning of this year and entered the bear market.
The US jobs report on Friday, 2.9.2022, was strong for the US dollar. This followed the hawkish Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole seminar session.
At the Gascon Hall symposium, Powell said there would be some pain if we didn’t fight inflation faster.
The Fed Chairman’s speech and US economic data last week were a clear indication that the Federal Reserve will increase its tightening in raising interest rates, as economists’ expectations indicate a 75-point hike in September.
Foreign currencies fell significantly against the US dollar, as the euro recorded its lowest level since 2002 and fell below $0.9900, while the British pound fell to its lowest level since March 2020. As for the Japanese yen, it weakened due to the monetary easing policy pursued by the Central Bank of Japan The yen fell to its lowest level since 1998 against its US counterpart.
And gold settled in today’s trading above $1700 an ounce.
Markets are waiting:
This week will be important for investors and traders with the release of important data
Today, Monday, 5.9.2022, OPEC+ is scheduled to meet and is expected to decide to continue its current approach to oil production, raising or lowering it.
It is worth noting that oil prices witnessed a significant decline last week, and the light sweet oil Nymex recorded a decline of more than 8%.
The meeting of the central banks will also be important, and the interest rate decision will be announced:
The Reserve Bank of Australia will meet tomorrow morning, 6.9.2022. With expectations of a 50 point interest rate hike and a slight decline in inflation in Australia.
As for economists’ expectations, the Central Bank of Canada will raise the interest rate by 75 basis points in line with the Federal Reserve.
In the last meeting of the Bank of Canada, the interest rate was raised by 100 points suddenly, and we do not rule out that it will do it again.
The most important event will be the European Central Bank meeting, and expectations for a 75 basis point interest rate hike. Several members of the European Central Bank administration last week indicated that the central bank should move to raise interest rates to combat high inflation due to high energy and food prices.
Europe is facing a very big crisis with the rise in gas prices due to the suspension of the Nord Stream One pipeline from the Russian side due to maintenance, as the Russian government claims.
The suspension of the supply of Russian gas from the giant company, GazPro, owned by the Russian government, is causing a major crisis in the European Union, especially Germany, with its inflation rising by 50%.