Market commentary
- In August, the dollar posted a small net gain. The rise was supported by a minor increase in U.S. interest rates, after months of declines, and a flight to quality triggered by a global upsurge in COVID-19 cases driven by the Delta variant. The ICE U.S. Dollar Index® (USDX®) closed the month at 92.64, up about a ½%. However, USDX did approach the 94 level mid-month as the market anticipated that the Fed, at its annual Jackson Hole conference, would announce the size and scope the tapering of its bond purchases. When that did not occur, the dollar drifted lower from its August highs and settled into a trading range for the remainder of the month.
- In Europe, EUR saw an uptick in day-to-day price action versus the dollar as compared to a relatively lackluster July, but by month end, the euro ended just marginally weaker. Staring August close to $1.20 level, EUR fell below $1.17 mid-month, for the first time in 2021. It didn’t remain there very long, only two days, and the euro spent the rest of the month on an upward trend, closing at $1.1808, down about a cent on the month. High Eurozone interest rates, pushed by rising US Treasury yields and the higher inflation reading in a decade, was the driver behind the stronger EUR. Likewise, sterling had a similar move. GBP began the month at about $1.40, then fell 4 cents by mid-month only to recoup about half of those losses to close out the month just below $1.38. Elsewhere in Europe, Scandinavian currencies posted like results, giving back 2% to 3% early on, with NOK test the 2021 low above 9 per dollar, but rallying into month end. The exceptions to this price action were CHF and RUB, both of which traded in a narrow range against USD in August.
- Asia-Pacific currencies had a calm month versus the dollar in August. In Japan, the yen stopped the decline against USD that it experienced over the past few months. Rising COVID-19 cases and the anxiety surrounding further increases related to hosting the Summer Olympic Games kept JPY held back any potential JPY gains. CNY also held to a tight trading range, staying close to its multi-year high, in August despite weakening economic numbers out of China. Continuing lockdowns throughout Australia in August put pressure on AUD, with the currency falling 3 cents from its high, bottoming out just above 71 US cents. Later in the month, the Aussie rallied to close around the 73 U.S. cents level. New Zealand also had its COVID-19 problems, pushing the kiwi down to 68 US cents before improving to end the month at $0.70.
- Elsewhere, CAD continued to fall, getting pummeled mid-month when crude oil dipped below $65 per barrel. The loonie dropped briefly to 1.2950, after beginning the month at 1.2450. As oil recovered, so did CAD, closing August at 1.2610. Emerging market central banks remain on the forefront of reducing economic stimulus by leading the way in raising interest rates. Brazil and, on August 31, Chile posted 75 basis point rate increases, stabilizing both BRL and CLP against USD. TRY posted a 2% gain, following on from the trend started in July.
USDX® Performance
| Spot rates | TICKER | 2-Aug-21 | 31-Aug-21 | Monthly Change |
| USD/EUR | EUR A0-FX | 1.18691 | -1.1808 | -0.163%% |
| JPY/USD | JPY A0-FX | 109.31 | 109.968 | 1.739% |
| USD/GBP | GBP A0-FX | 1.3883 | 1.3755 | -0.986% |
| CAD/USD | CAD A0-FX | 1.2503 | 1.26108 | 0.249% |
| SEK/USD | SEK A0-FX | 8.5944 | 8.622 | 0.321% |
| CHF/USD | CHF A0-FX | 0.90502 | 0.91461 | -2.254% |
| US Dollar Index | DX A0 | 92.048 | 92.626 | -0.459% |
| Other contracts | TICKER | 2-Aug-21 | 31-Aug-21 | Monthly Change |
| Mini Brent Crude | BM-ICS | 72.89 | 71.63 | -1.759% |
| MSCI World Index | MWL | 3065.5 | 3138.7 | 2.332% |
| MSCI Emerging Markets Index | MME | 1287 | 1299.2 | 0.939% |
| Mini US Dollar/Offshore Renminbi | CHM-ICS | 6.4695 | 6.464 | 0.145% |
USDX® Futures Performance (YTD)
Manage $USD risk in a single transaction
USDX® futures and options offer investors tools to speculate on moves in the $USD relative to a basket of world currencies.
| USDX® Futures | Mini USDX® Futures | USDX® Options | |
| Trade on | ICE Futures U.S. | ICE Futures Singapore | ICE Futures U.S. |
| Contract size | One contract = $1000 X index value | One contract = US $200 x index value | One futures contract ($1000 X Index value) |
| Expiry | Third Wednesday of the expiration month | Cash-settled against USDX® Futures on the last Trading Day for the expiry month | Third Wednesday of the expiration month |
| Settlement | Physically settled against the six component currencies in their respective percentage weights | Cash-settled against the USDX® futures final settlement price | Physically settled against the six component currencies in their respective percentage weights |
| Trading hours | 8:00 P.M. - 5.00 P.M. ET | 8:00 A.M. - 6.00 A.M. SGT | 8:00 P.M. - 5.00 P.M. ET |
| Symbol | DX | SDX | DX |
| Product spec | View now » | View now » | View now » |