U.S Dollar Index Climbs 10 Month High
Major global asset classes and Asian indexes worry as dollar gains strength.
The U.S dollar index reached 93.41 (+0.276) as of 10:03 AM GMT +7 with FED’s indication of tapering its asset purchase program early next year. The FED curving out the dollar from the market is supporting the rise of the currency.
Major asset classes are on a downward trend given uncertainties about the time of the tapering by FED. The S&P 500 Index plunged 47.81 points (-1.07%) erasing the gain over a month. The Asian equity benchmark MSCI Asia Index leveled off at 10 months low this morning. Asian indexes are tracking the negative trend on Wall Street with Nikkei 0.72%, Hang Seng 1.87%, KOSPI 1.444% and the SET index opened with sharp downturn trading at 0.21%.
On the other hand, major commodities WTI dipped 1.36%, BRENT 1.10% and Gold 0.45 % trading at $1780/ounce. The Fed slowing down its asset purchases will put more spotlight on the dollar than the precious metal Gold which justifies investors’ move against the metal.
In the currency market, the dollar gained sharply against major currencies. The Thai Baht is trading at 33.395, inching up by 0.31% and testing resistance at 33.455 on August 10. Baht fell short against the dollar due to the dollar rise as well as worsening COVID cases in the Kingdom with no clear signs of robust inoculation and eventually resuming economic activities.
The dollar index is referenced from six major baskets of currencies with the highest weight to EUR (57.66%), JPY (13.6%), GBP (11.9%), CAD (9.1%), SEK (4.2%) and CHF (3.6%), according to Intercontinental Exchange. The index is considered widely as a gauge of the strength of the green buck.