All articles tagged with #dollar
The U.S. Federal Reserve raises rates for the first time since 2023 and signals another hike, likely lifting the dollar, pressuring other currencies, elevating global bond yields, and weighing on equities as central banks worldwide reassess policy amid divergent inflation trends.
Global investors are pulling back from U.S. assets as the country's debt climbs toward $40 trillion and sanctions intensify, raising doubts about the dollar’s status as a safe haven and pushing capital to explore alternative destinations while foreign buyers still pledge some investment in the U.S.
Investors are bracing for Fed Chair Kevin Warsh’s Jackson Hole speech, hoping for clarity on future policy as U.S. Treasury buys long-term bonds to cap yields; the move, and Warsh’s comments, could steer the dollar and shape the yield curve amid elevated long-term rates and inflation concerns.
Gold rose to a three-month high near $4,696/oz as a weaker dollar and falling yields boosted demand, while Bitcoin briefly topped $80,000 for the first time in three months. July gold-backed ETF inflows reached about $3 billion, and the World Gold Council noted softer data and bond buybacks helping the rally, signaling a nascent gold rebound that’s moving in tandem with BTC amid macro uncertainty.
Bitcoin jumped through the $67,000 level and gold rose as U.S. Treasury buybacks and a weaker dollar boosted risk assets, fueling a high-momentum week for crypto. Regulators signaled a friendlier stance on crypto finance, with the CFTC weighing easier rules, while political figures like Trump continued to push crypto-friendly policies; the rally was helped by bears covering positions, with billions in bearish crypto bets liquidated by week’s end.
Fortune reports that economist Robin Brooks warns the Treasury’s plan to buy back more long‑term debt could put the dollar on a path toward debasement and a devaluation spiral similar to Japan’s, while other analysts argue the move is largely a symbolic fix that won’t address the underlying deficit; the debate centers on whether yields will stay elevated and what this means for the dollar’s near‑term trajectory.
The dollar eased as the U.S. Treasury signaled expanded bond-buybacks to dampen yields, prompting questions about potential implications for the currency. The euro rose to about $1.1703 and the pound held near its highs, while the yen firmed after inflation data, as traders await the Federal Reserve’s Jackson Hole symposium for new guidance.
Global shares edged higher and the dollar weakened toward two‑month lows after softer U.S. data, including a July retail‑sales drop, lowering the likelihood of a Fed rate hike next month to about 30%. European and Asian indices rose while Treasuries pulled back yields, and oil prices were mixed as investors await the next round of PMI data and key earnings this week.
Gold rose to a more-than-two-month high as a softer dollar and a July inflation print in line with estimates tempered expectations for a September rate hike, with spot gold around $4,409 an ounce and futures near $4,467 as traders price about 40% odds of a hike at the next Fed meeting.
JPMorgan CEO Jamie Dimon warned that the dollar could lose its status as the world’s reserve currency if the United States does not maintain its economic and military leadership. He pointed to the dollar’s share of global reserves (about 57%), vulnerabilities from overreliance on China for critical minerals, and a long-run need to bolster domestic production. Dimon also highlighted the Iran conflict as exposing defense-readiness gaps and noted JPMorgan’s $1.5 trillion Security and Resiliency Initiative to strengthen essential industries, from minerals to AI and quantum computing.
Goldman Sachs argues that US-Japan yen intervention is unlikely to threaten the dollar’s status as the world’s dominant reserve currency, pointing to the dollar’s deep capital markets and the Fed’s FIMA facility as crucial advantages during currency-support episodes. While policy uncertainty can weigh on the dollar, the bank notes that past instances where Treasuries were used to back currencies have typically reinforced the dollar’s central role.
BNP Paribas Wealth Management forecasts gold could reach $5,000/oz within 12 months, implying more than 20% upside as the dollar weakens (about a 3.5% decline over the year) amid inflation and debt concerns; the World Gold Council notes 89% of central banks plan to boost gold allocations, and retail ETF inflows via GLD could follow, supporting a bullion rally amid easing geopolitical tensions.
Global bond and currency investors are reassessing the “Sell America” trade as recent U.S. policy moves—from Fed signals to Japan’s yen support—fuel uncertainty about the dollar and Treasuries, even as stock markets stay resilient and foreign Treasury holdings remain large.
The U.S. dollar hovered near a two-week low as investors pared back bets on a Federal Reserve rate hike this year, while the yen remained near a 40-year trough amid ongoing intervention concerns. The dollar index was around 100.9, with EUR about $1.1435 and GBP near $1.335, and USD/JPY around 161.6. Analysts say intervention risk could spark volatility but is unlikely to reverse the broader trend, as markets await Fed minutes for clearer policy signals and monitor yen dynamics.
Oil has fallen back to pre-war levels as supply normalizes, but markets still price in Fed hikes, implying a hawkish shift that the author argues is mispriced. He expects falling oil to reduce inflation and real interest rates, push the dollar lower, and lift gold and the S&P 500 after the next CPI release.