All eyes are on the direction of the U.S. dollar, which has been falling due to lower interest rates

All eyes are on the direction of the U.S. dollar, which has been falling due to lower interest rates

12.08.2021

Yesterday, the Dow Jones Industrial Average and the S&P 500 hit new record highs on the U.S. markets, leading to a market trend characterized by rising stock prices, falling interest rates, and lower commodity prices.Following the passage of the infrastructure investment bill yesterday, U.S. President Biden stated that “the $3.5 trillion spending plan will not accelerate inflation,” causing infrastructure-related stocks such as Caterpillar to rise.The yield on the 10-year U.S. Treasury note has fallen from a peak of 1.37% to the 1.35% range.

Following a decline in the yield on 10-year U.S. Treasuries, the U.S. dollar retreated, causing the GBP/USD pair—which had been trending lower—to rebound. It recovered from this month’s low of 1.380 to 1.388.The AUD/USD pair also rebounded similarly, recovering from 0.732 to 0.738. Since the AUD/USD pair has been forming higher lows on the hourly chart, we need to monitor the direction of the U.S. dollar while assessing whether the pair will continue its upward momentum.

Today, at 15:00, the UK will release its second-quarter GDP (flash estimate), industrial production, manufacturing output, and trade balance; at 16:00, Turkey will release its industrial production; at 18:00, the Eurozone will release its industrial production;at 8:00 PM, Turkey’s TCMB policy rate and statement; at 9:30 PM, U.S. initial jobless claims and the U.S. Producer Price Index; at 11:00 PM, U.S. weekly natural gas inventories; and at 2:00 AM, a U.S. 30-year Treasury auction.We will carefully monitor the situation to see if today’s U.S. 30-year Treasury auction goes smoothly and whether it leads to a shift in the direction of the U.S. dollar.