The U.S. dollar saw gains after a critical manufacturing report in China signaled the world’s second-largest economy is slowing down. Today’s insight includes a bounce-back for oil prices, economic concerns Down Under, testimony from European Central Bank head Mario Draghi and the world’s reaction to China’s slowing economic growth.
The U.S. dollar approached two-week highs on Tuesday morning after Atlanta Federal Reserve Bank President Dennis Lockhart said he predicts the U.S. central bank will raise interest rates at the October or December FOMC meeting.
The euro and yen climbed to a seventh-month peak against the dollar on Monday as investors, worried about the slowdown in China, reversed riskier bets in so-called "carry trades" and bought back the low-interest rate currencies used to fund those assets.
The dollar advanced on Monday, rising against a basket of currencies for the third straight session, as traders focused on potential U.S. interest rate hikes and shook off worries about a China-led "currency war."
By far the biggest storyline in the markets this week has been the precipitous fall in the price of gold. After closing just below key support at the 1140 level last week, bullish traders panicked this week, driving the yellow metal down by a whopping 5% from last Friday’s close as of writing.