Daily Digest Market Movers: Japanese Yen declines as US Dollar remains stable
- Japan’s Tankan Manufacturers Sentiment Index rose to 11.0 in July from 6.0 in June. This figure registered the first gain in four months and indicated a pickup in economic activity.
- The US Retail Sales for June stayed mostly in line with expectations. Retail Sales in the United States held steady at $704.3 billion in June, after a 0.3% gain (revised from 0.1%) in May, and are in line with market expectations.
- Fed Chair Jerome Powell mentioned on Monday that the three US inflation readings of this year "add somewhat to confidence" that inflation is on course to meet the Fed’s target sustainably, suggesting that a shift to interest rate cuts may not be far off.
- Fed Bank of San Francisco President Mary Daly stated that inflation is cooling down in a way that bolsters confidence that it’s on its way to 2%. However, Daly added that more information is needed before making a rate decision.
- US President Joe Biden on Monday addressed the nation from the White House, where he condemned all political violence and called for unity, according to CNBC. Biden further stated that “it’s time to cool it down” and noted not just the weekend attack on Trump but also the possibility of election-year violence on multiple fronts.
- According to Saxo Bank, the increasing probability of a Trump 2.0 presidency has been bolstering the US Dollar. Market participants anticipate that a second term for Trump could lead to aggressive fiscal policies and trade measures, thereby driving demand for the greenback.
- BBH FX strategists highlight that recent softness in US data poses challenges to their perspective that the backdrop of sustained inflation and strong growth in the US largely remains intact. They note increasing concern among Federal Reserve officials regarding weaknesses in the labor market.
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