The dollar index rose again above 93 on Thursday, with the dollar rising against Gmur10 as markets waited for Federal Reserve Chairman Colin Powell's speech on Friday, with the Canadian dollar leading the decline in oil prices. Gold futures prices closed slightly higher. Investors are keeping a close eye on the Fed's Jackson Hole policy seminar, looking for clues about the Fed's scaling back its bond-buying program. Oil prices closed down more than 1 per cent, ending a three-day rally as concerns about demand were raised by an increase in novel coronavirus infection and some production resumed after a Mexican oil rig was disrupted by a fire.
In terms of commodity closing, COMEX December gold futures closed up 0.2% at US $1795.20 / oz. WTI October crude oil futures closed down 94 cents, or 1.37 percent, at 67.42 US dollars per barrel, while Brent crude oil futures closed down 1.18 US dollars, or 1.63 per cent, at 71.07 US dollars per barrel.
Us stocks closed down 192.38 points, or 0.54%, at 35213.12; the S & P 500 closed down 26.38, or 0.59%, at 4469.81; and the Nasdaq composite index closed down 96.1, or 0.64%, at 14945.8.
A list of major global markets
All three major US stock indexes closed lower on Thursday, with the S & P 500 and NASDAQ falling for the first time in six days after hitting record closing highs. Markets were worried about developments in Afghanistan and concerns about a possible shift in Fed policy triggered a broad but smaller sell-off. The Jackson Hall seminar will be held on Friday. Dallas Fed Chairman Kaplan made a hawkish speech and the sell-off momentum intensified after the explosion outside the Kabul airport in Afghanistan, helping to increase risk aversion. Kaplan said he believes the progress of the economic recovery justifies the Fed's start to scale back its asset purchase program in October or shortly after. He is not currently a voting member of the Federal Open Market Committee ((FOMC)). Megan Horneman, director of portfolio strategy at Verdence Capital Advisors, said Kaplan's speech made people a little confused about the reduction schedule, but in my opinion, the stock market is focused on geopolitical issues, and people are buying safe assets during times of geopolitical tension.
Precious metals and crude oil
Spot gold held steady at $1792.44 an ounce on Thursday after falling sharply on the strength of the dollar as investors expected the Fed to take a position on tapering economic support at the Jackson Hole seminar.
Gold fell 1.2% at one point on Wednesday and fell below the key $1800 mark as the stronger dollar undermined gold's attractiveness. Investors are keeping a close eye on Federal Reserve Chairman Colin Powell's speech at Friday's seminar. Earlier, St. Louis Fed Chairman Bullard hinted that the Fed should end its bond-buying program early next year.
Jeffrey Christian, managing partner of CPM Group, said the possibility that most people were concerned was that the Fed hinted that the economy would strengthen in the next year or two and would gradually scale back its bond purchases, which was hanging over the gold market. Christian attributed the rise in gold prices in part to political tensions in Afghanistan.
Oil prices closed down more than 1 per cent, ending a three-day rally as concerns about demand were raised by an increase in novel coronavirus infection and some production resumed after a Mexican oil rig was disrupted by a fire. The possibility of other supply disruptions limited the decline. Energy companies are preparing for the possibility of a severe storm hitting the Gulf Coast of the United States this weekend. The general weakness in global stock markets also weighed on oil prices, analysts said.
The National Hurricane Center says a storm brewing in the Caribbean could escalate into a major hurricane that will hit the Gulf Coast of the United States on Sunday. The hurricane, with winds of up to 111 miles (178 kilometers) per hour, is classified as a major hurricane that can wreak havoc on shore.
John Kilduff, a partner at Again Capital LLC, said oil companies were prepared for the storm, which provided some support for the market and partly offset fears that more supply would enter the market.
Foreign exchange
The dollar jumped from an one-week low on Thursday after two regional Fed chairmen hinted that the Fed would accelerate its asset purchase program, pushing the dollar to key resistance levels. Volatility in the foreign exchange market eased before Powell's speech, and the implied volatility of the euro against the dollar fell to an one-week low.
The dollar index broke through the key resistance level of 93, rising 0.26% to 93.06; on Wednesday, the index fell to 92.80 for the first time since Aug. 17; the dollar index rose slightly after comments by St. Louis Fed Chairman Bullard. Brad is seen as a policy hawk. Mr. Brad said in an interview that he doubted whether inflation would slow, so the Fed needed to start scaling back its bond-buying program. We must start to scale back our bond purchases and end them in the first quarter of next year. Then we can assess inflation. Dallas Fed Chairman Kaplan said the strength of the US economy still makes it possible for the Fed to start scaling back its monthly bond purchases in October or shortly after. Steven Ricchiuto, chief US economist at Mizuho Securities, said the dollar index rose above 93 two weeks ago and has been testing that level as support ever since. The market may discount Mr Brad's comments, in part because he does not have the right to vote on the Fed's policy-making committee, but Ricchiuto says his voice can be heard in the boardroom, so you have to assume it does have some impact. Brad and Kaplan's comments coincided with the opening of the Fed's annual seminar in Jackson Hole, Wyoming, and Fed Chairman Colin Powell's speech received a lot of attention on Friday. Analysts doubt whether Powell will provide new hints on when the Fed may start cutting back on asset purchases. Lee Ferridge, head of North American multi-asset strategy at State Street Global Markets (State Street Global Markets), said Powell would reiterate Kaplan's message last week to remain flexible and that Powell would be doing well if the market did not fluctuate when he spoke. He does not want the market to panic about scaling back bond purchases at a time of economic slowdown, which he will always do, leaving the option of cutting bond purchases on the table, but also coming up with the idea of flexibility. The euro fell 0.117% against the dollar to $1.1752, and options traders thought the news from Jackson Hole was less likely to cheer the euro market up. The dollar rose 0.42% to 0.9178 against the Swiss franc. Sterling fell 0.46 per cent to 1.3700 against the dollar after hedge funds and medium-and long-term large investors sold sterling after Fed official Brad made hawkish comments. The Australian dollar fell 0.54 per cent to 0.7237 and the New Zealand dollar fell 0.37 per cent to 0.6948. Falling oil prices put pressure on the Canadian dollar; the dollar rose 0.76 per cent to 1.2687 against the Canadian dollar; the Ferridge of State Street Global Markets said the Canadian dollar had not yet breached the 1.25 level because of economic growth expectations, uncertainty over the Canadian election and the recent fall in commodity prices.
