Dollar is Strongest its Been in Two Years and Other Market News for the Week

Matty-Sways

U.S. dollar reached its strongest level in two years despite attacks on Saudi Arabia and spike in overnight lending.

The dollar was up 0.3% against the euro, meaning it has gained 4.3% against the European currency this quarter. One euro bought $1.091. It is trading at its strongest level in more than two years against both the euro and a number of currencies in the ICE dollar index.

This quarter showed weaker manufacturing and export data globally, although employment and consumer spending has remained resilient. Still, the Federal Reserve and European Central Bank have begun new rounds of looser monetary policy, supporting stock markets.Official data showed manufacturing activity rebounded in September mainly on improving domestic demand.

In other U.S. news:

  • U.S. futures were up 0.3% and the S&P 500 is set to end the quarter almost flat having touched a record high at the end of July.
  • WSJ reported that the U.S. shale boom was slowing, with production growth of just 1% in the first six months of 2019.
  • 10-year Treasury yields were 0.02 percentage points higher at 1.697%.

News in other Markets:

  • The Chinese manufacturing data was “encouraging, given the tighter industrial production restrictions ahead of the 70th Anniversary Celebration for environmental concerns,” Citigroup economist Xiangrong Yu wrote in a note. Shanghai was the biggest mover Monday, slipping 0.9% and this market will be closed for the duration of the celebration.
  • The Japanese Nikkei 225 was down 0.6%, but closes out the quarter as one of the better performers, up 2.3%.
  • The Stoxx Europe 600 was up 0.1% and the FTSE 100 in London was 0.3% lower.
  • In, Hong Kong stocks set for worst quarter since 2015, The Hang Seng has been one of the worst performing of the world’s major indices in the past three months, down nearly 9%, since the protests took a more violent turn in late July.
  • S&P 500 and Dow Jones Industrial Average futures up 0.3%
  • German's 10-year bond yields were 0.08 percentage points higher at minus 0.566%
  • French 10-year yields were 0.1 points higher at minus 0.271%.

Currency and Oil

  • The yuan, meanwhile, has dropped nearly 4% against the dollar this quarter, its weakest run since the second quarter of 2018.
  • Gold was also lower, down 0.85% at $1493.60.
  • Brent crude oil was down 1.2%

Saudi Arabia’s Crown Prince Mohammed bin Salman said in an interview with “60 Minutes” broadcast Sunday that energy prices could hit unimaginable highs if a conflict with Iran escalated.

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