US Dollar steadies as markets head back into risk-on mood

LONDON(August 27) The US Dollar (USD) trades mixed on Tuesday’s European session, halting the mild recovery seen on Monday, with only one pattern on the quote board to retain. The US Dollar is up against most major Asian currencies such as the Japanese Yen (JPY) and the Korean Won (KRW). The risk-on mood seems to have returned to markets – with equities in the green across Asia, Europe, and US futures – as safe-haven flows retreat amid easing hostilities in the Middle East. 

On the US economic calendar front, the Housing Price Index for June will be the main event to look at. the second element will be the Consumer Confidence Index for August. After the stellar Durable Goods Orders numbers from Monday, the Consumer Confidence Index should also head higher. 

Daily digest market movers: Look out for pivotal data

• The US session kicks off with the Redbook Index for the week ending August 23, to be published at 12:55 GMT. The previous reading was at 4.9%.
• The Housing Price Index will be released at 13:00 GMT. The previous number showed prices remained unchanged, and a slight 0.2% uptick is expected for June. 
• At 14:00 GMT, the Consumer Confidence Index for August will be released. the previous number was at 100.3, and economists forecast it to increase slightly to 100.9. 
• Also at 14:00 GMT, the Richmond Fed Manufacturing Index for August will be released. An uptick is expected, from -17 to -14. 
• Equities in Asia and Europe are overall up on the quote board. US futures are taking over the positive tone and are up by less than 0.5%.
• The CME Fedwatch Tool shows a 71.5% chance of a 25 basis points (bps) interest rate cut by the Fed in September against a 28.5% chance for a 50 bps cut.  Another 25 bps cut (if September is a 25 bps cut) is expected in November by 50.2%, while there is a 41.3% chance that rates will be 75 bps (25 bps + 50 bps) below the current levels and a 8.5% probability of rates being 100 (25 bps + 75 bps) basis points lower. 
• The US 10-year benchmark rate trades at 3.82%, a fresh weekly high.

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