The USD took its steepest dive of the year in August, losing over 2% against other major currencies as markets anticipated the US Federal Reserve might cut interest rates amid signs of a slowing economy, Reuters reports. The greenback nevertheless rose to a two-week high yesterday, as markets braced for a series of key economic reports, including Friday's U.S. Jobs report, which pundits think will help set the tone for the US Federal Reserve’s next three interest rate meetings.

The USD’s fall eased pressures on most global markets, particularly in Japan, offering breathing space for (emerging) markets to cut rates and become more sensitive to domestic growth issues, Reuters suggests.

Currencies in Latin America gained no ground on the greenback in August thanks to economic troubles and shaky commodity prices.

The weaker USD positioned the EUR and GBP as the top-performing major currencies this year, with the GBP above USD 1.30, up over 25% since its record lows, and the EUR above USD 1.10. Sweden’s SEK was the best-performing major currency, rallying 4% in August.

THE MARKETS THIS MORNING-

Asian markets fell sharply in early trading this morning, mirroring yesterday’s tech-led selloff on Wall Street. Japan’s Nikkei and Taiwan’s Taiex were each down more than 3%, while Australia’s ASX 200 was off 1.7%. Benchmark indexes in China have so-far been least impacted: The Shanghai Composite is down 0.6% and the Hang Seng is off 1.5%.

Futures suggest we can expect more of the same in Europe as well as on Wall Street and Bay Street when trading opens there later today.

EGX30

31,018

+0.9% (YTD: +24.6%)

USD (CBE)

Buy 48.43

Sell 48.57

USD (CIB)

Buy 48.45

Sell 48.55

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

12,180

+0.1% (YTD: +1.8%)

ADX

9,379

+0.2% (YTD: -2.1%)

DFM

4,370

+0.3% (YTD: +7.6%)

S&P 500

5,529

-2.1% (YTD: +15.9%)

FTSE 100

8,198

-0.8% (YTD: +7.3%)

Euro Stoxx 50

4,913

-1.2% (YTD: +8.7%)

Brent crude

USD 73.75

-4.9%

Natural gas (Nymex)

USD 2.20

0.0%

Gold

USD 2,524.20

+0.1%

BTC

USD 58,149.10

-1.5% (YTD: +37.4%)

THE CLOSING BELL-

The EGX30 rose 0.9% at yesterday’s close on turnover of EGP 5.0 bn (27.5% above the 90-day average). International investors were the sole net sellers. The index is up 24.6% YTD.

In the green: Abu Qir Fertilizers (+4.9%), Juhayna (+3.3%), and Cleopatra Hospitals (+2.4%).

In the red: Palm Hills Development (-1.7%), Eastern Company (-1.6%), and Orascom Construction (-1.1%).

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