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Nasdaq index dropping today: seventh day of declines



nasdaq index dropping today

The Nasdaq Composite index closed in the negative for the first time since 2016 for the seventh trading day in a row. Another bad news, for it was good US economic statistics.

Almost two weeks have passed since August 26, but the negative impulse given to tech stocks by the “hawkish” speech of Fed Chairman Jerome Powell still will not fade. The Nasdaq Composite lost another 0.74% yesterday, marking the rarest streak of seven consecutive days of decline.

Why is the Nasdaq dropping? 

The head of the Fed was able to finally convince the public that monetary policy will quickly tighten in the fight against inflation. That took a toll on rate-sensitive tech stocks, with the Nasdaq index dropping 12.42% today from its August peak and 28.79% from its all-time high.

But other securities are also getting cheaper. The market fears that the Fed might be wrong to tighten policy and send the economy into a recession. Strong economic statistics, which seem to suggest that the chances of a “soft landing” are growing, are perceived by them as evidence that the regulator, encouraged by it, will get carried away.

The ISM Non-Manufacturing PMI rose to 56.9 in August, the second straight increase after three months of decline. Analysts had expected a drop to 55. That was good news for the economy and bad news for the market.

The yield on the benchmark 10-year U.S. Treasury soared to 3.365%, back to mid-June levels. In 2-years it jumped to 3.522%, again near last week’s peak when it rewrote its high from 2007. The futures market immediately overestimated the likelihood of a 75bp rate hike at the Fed’s next meeting. According to the CME FedWatch Tool, the odds of that rose to 74% from 57% in previous trading.

This contributed to the decline in stocks — and the Dow Jones Industrial Average closed 0.55% and the S&P 500 was down 0.41%. Their share of tech stocks is lower than the Nasdaq, and they didn’t repeat its streak: these indices have fallen only six days out of the last seven. But they also noticeably moved away from their August peak: the Dow fell 9.15% and the S&P 500 rose 9.64%.

Nonetheless, the broad market index has so far managed to close above strong support around 3,900 points, although it looked lower yesterday. That level has been watched by many since early September.

Earlier, we reported that the Euro exchange rate daily declines against the dollar on fears of a worsening energy crisis.


Current yuan to dollar exchange rate has fallen to its lowest since 2008



current yuan to dollar exchange rate

Current yuan to dollar exchange rate dropped to 7.2256 yuan per dollar. This is the lowest level in 14 years, reports RBC. The offshore yuan-dollar exchange rate has fallen to a record low of 7.2577 yuan per dollar since China began trading the currency in 2010.

The People’s Bank of China sets reference exchange rates for the yuan daily. On Tuesday it set the yuan-dollar exchange rate at 7.0722 yuan. This was the lowest since July 2020. The exchange rate of the yuan, which is traded in mainland China, is controlled by the NBK and can deviate from the reference rate by no more than 2 percent in either direction during the day. In Hong Kong and Macau, the CNH offshore exchange rate to foreign currencies may vary without restrictions.

The Chinese yuan to dollar exchange rate today fell to its weakest level since the 2008 global financial crisis amid persistent dollar appreciation against major currencies and fears that China is weakening support for its currency.

The yuan has fallen more than 4 percent against the dollar this month and may post its worst performance in a year since 1994, the publication estimated. China’s currency is under pressure as the country’s monetary policy diverges from U.S. policy, leading to capital outflows.

Earlier we reported on history low for the pound British.

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History low for the pound British



history low for the pound british

Today we can observe history low for the British pound. The British pound has fallen in the international forex market by almost 5% against the dollar – to a record low of $1.0384. The pound fell 0.85% against the U.S. dollar to $1.0762.

The British currency depreciated after the Ministry of Finance of the country promised to continue cutting taxes, raising fears that the new policy will lead to a sharp rise in inflation and the national debt, Bloomberg wrote. The pound’s collapse was the biggest intraday drop since March 2020, when markets were panicked by the start of the COVID-19 pandemic, the publication estimated.

The sell-off in the currency began on Friday, after the government announced a plan for a massive tax cut in the U.K., which will affect individuals and businesses and increase the budget deficit.

“History low for the British pound shows that markets do not trust the UK,” said Saxo Capital Markets strategist Jessica Amir. – The pound is one step away from parity with the dollar, and things will only get worse from here.”

The British currency has already fallen 20% against the dollar this year. According to Bloomberg, the fall in the British pound sterling in 2022 surpassed the collapse seen after the vote to leave the European Union (Brexit) in 2016. At that time, the U.K. currency depreciated by about 16% in one year.

Earlier we reported that the dollar is getting cheaper against most currencies after rising the day before.

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The dollar is getting cheaper against most currencies after rising the day before. Global money is getting cheaper



money getting cheaper

The dollar is getting cheaper against the euro, the yen and the pound sterling today after a solid rise in the previous session on the background of the fact that all the world’s money’s getting cheaper. 

The dollar is correcting because investors are trying to fix profits after its significant strengthening, said Trading Economics. Experts believe that the U.S. currency will continue to strengthen on the background of a rapid tightening of monetary policy by the Federal Reserve (FRS). Also, the dollar is supported by reducing the appetite for risk in world markets.

Further growth in volatility in the financial markets will strengthen the dollar because of its status as a “safe haven” currency, said an analyst on the currency market, CBA Carol Kong.

The euro rose 0.53% to $0.9660 against the dollar, up from $0.9609 at the close of the previous session. The day before, European currencies were cheaper against the dollar by 0.8%.

The pound rose by 1.07% to $1.0803 during the trading session, compared to $1.0689 the day before. The exchange rate of the dollar against yen decreased by 0.30% – down to 144.31 yen against 144.75 yen by the end of the previous session. On Monday the American currency grew by 1.5% against the pound and by 1% against the yen.

The index, calculated by ICE, which shows the dollar trend against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and the Swedish krone), was losing 0.5% during trading. The day before, the indicator had updated its 20-year high.

Earlier we reported that the Nasdaq is on the plus side amid signs that growth stocks are recovering.

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