Dollar Slides as Traders Trim Fed Rate-Hike Bets – Markets Wrap
The Dollar fell against most of its major peers after weak US economic data reduced bets on a Fed rate hike next month.
A gauge of the Dollar slipped 0.1%, heading for a third day of losses and hovering near levels last seen in May. MSCI’s emerging-market currency index rose to an intraday record, with the Taiwan dollar and Thai baht among the region’s biggest gainers, while the Asia Dollar Index climbed to the strongest level since May.
Pressure on the Dollar increased after US government data on Friday showed retail sales fell in July by the most in more than a year as consumers pulled back on purchases. Swaps traders see less than a 30% chance the Fed will raise rates next month, down from about 50% odds only a week ago.
Treasuries rose across the curve, with the yield on the rate-sensitive two-year note falling 2 bps to 4.15%. Yields on the 10-year and the 30-year bonds both declined by 1 bp.
Brent gained 0.2% to about $88.65 a barrel as renewed Israeli attacks on Lebanon and the prospect of fresh US sanctions on Iran added to geopolitical uncertainty. MSCI’s Asia Pacific equities gauge rose 0.2%, while equity-index futures for Wall Street and Europe both edged higher.
Futures contracts for the Nasdaq 100 rose 0.3%. Gold advanced 0.4% to about $4,395 an ounce, and copper rose toward a record, with the metal’s spot price trading as high as $478 a ton. The Yen edged higher against the Dollar after a report showed Japan’s economic growth unexpectedly slowed. A slew of Chinese data will be published Monday, with economists expecting consumer spending to have picked up slightly in July, while factory output may have slowed.
