The Traderszone Network

NEW YORK/LONDON (Reuters) – Most bouts of global market volatility in recent years have featured one constant: the U.S. dollar strengthens as investors clamor for the perceived safety of U.S. assets such as Treasuries. By contrast, over the last two previous trading days, the dollar lost 4.0 percent against the yen, while dropping to a seven-month low versus the euro on Monday, as world stock markets slumped and emerging market currencies plummeted.

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Faced with falling exports and deflation risks, it suited much of Asia to let their currencies drift lower, until China’s abrupt devaluation triggered a tide of volatility that is upsetting not just their currency management but also their growth strategies. China’s 2 percent devaluation on Aug. 11 added to evidence that its economy was struggling, and overseas it caused a ripple of panic that a currency war was in the offing.

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Amazon.com Inc (AMZN.O) said on Tuesday it will begin delivering wine, beer and spirits to U.S. customers for the first time as part of its speedy delivery service, Prime Now. The online retailer is expanding Prime Now, its one- and two-hour service, to Seattle, where the company is headquartered, and offering alcohol deliveries there. Amazon Prime, the company’s $99 per year shopping membership program, offers free two-day delivery on millions of items.

U.S. specialty truck maker Oshkosh Corp (OSK.N) has won a $6.75 billion contract to build 17,000 light tactical vehicles to replace the aging Humvees used by the U.S. Army and Marine Corps, the U.S. Army announced on Tuesday. Oshkosh beat out a team made up of Lockheed Martin Corp (LMT.N) and Britain’s BAE Systems Plc (BAES.L), as well as AM General, a privately held company that built the original Humvees, the Army said in a statement.

U.S. consumer confidence hit a seven-month high in August and new single-family home sales rebounded in July, suggesting underlying strength in the economy that could still allow the Federal Reserve to raise interest rates this year. “This is evidence of the ‘some further improvement’ in the economy that the Fed is waiting for to raise rates. The Conference Board said its consumer index jumped 10.5 points to 101.5 this month, the highest reading since January, amid optimism over the labor market.

Ray Dalio, the founder of the world’s largest hedge fund Bridgewater Associates, said the firm believes the next big move by the Federal Reserve will be to loosen U.S. monetary policy, not tighten it. In a client note sent out on Monday, Dalio said the Fed is paying too much attention to the short-term ups and downs of the business cycle rather than the longer-term ramifications of central banks driving interest rates to zero, which now leaves them no room to act if worldwide deflation takes hold.

Another light day on the expiries board
– USDJPY 117.00 (USD 377m) 120.00 (300m) 122.00 (579m)

     
– EURUSD 1.1300 (EUR 653m)
– GBPUSD none
Yesterday I highlighted notable expiries