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Global Currency Markets
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World stocks steady ahead of Jackson Hole symposium
Global stocks remained steady on Thursday as bullish revenue forecasts from Nvidia, which projected 70 percent growth through January 2028, offset investor caution regarding the upcoming Jackson Hole symposium speech by Fed Chair Kevin Warsh. European indices faced downward pressure, with the pan-European STOXX 600 falling 0.1 percent and the French CAC 40 declining 1 percent due to regional political uncertainty, while Asian markets saw modest gains. Simultaneously, Brent crude rose 0.8 percent to $88.5 as market participants monitored diplomatic efforts involving Qatar and Iran concerning the Strait of Hormuz.
Colombian Peso Declines to 3,128 per Dollar
The Colombian peso weakened by 1.24 percent on Wednesday, closing at 3,128.50 per dollar, which pushed the official TRM fixing to 3,118.24 for Thursday. This shift ended a period where the peso had been exceptionally strong, despite an 18.5 percent decline for the dollar against the peso earlier in 2026. The depreciation was driven by a decline in oil prices, a stronger US dollar following a 3.7 percent year-on-year US inflation reading, and investor caution regarding Colombia's upcoming September tax reform debate.
The impact of rising US Treasury yields on Asian markets
The 30-year US Treasury bond yield reached 5.33 percent on August 18, the highest level recorded since 2007. In response, US Treasury Secretary Scott Bessent announced a decision to double the size of planned bond buybacks to support market liquidity. This upward pressure on yields was driven by inflation concerns exacerbated by the war with Iran, as well as worries regarding the US fiscal deficit, a high supply of debt, and increased corporate borrowing for AI-related investments.
US dollar rises as Federal Reserve interest rate hike expectations increase
The U.S. dollar rose 0.21% to 99.12 on Wednesday following the release of July Personal Consumption Expenditures (PCE) data, which showed a 3.7% annual inflation rate, slightly exceeding the 3.6% estimate. This data increased the market-priced probability of a September Federal Reserve rate hike to 40.1%, up from 36% prior to the report. Concurrent developments included the Canadian dollar weakening 0.24% against the greenback following the collapse of trade talks and the imposition of retaliatory tariffs on $20 billion of U.S. imports, while ECB board member Isabel Schnabel signaled that European interest rates must rise further to address inflationary risks.
Markets brace for upcoming Jackson Hole economic conference
Central bankers and policymakers are gathering in Jackson Hole, Wyoming, for the Federal Reserve Bank of Kansas City's annual symposium, with markets focused on Fed Chair Kevin Warsh's scheduled keynote speech this Friday. The event follows the U.S. Treasury Department's recent announcement to increase long-term government debt buybacks to at least $4 billion starting September 9, a move initiated after 30-year Treasury yields reached a 19-year high. Investors are monitoring Warsh for potential guidance on Fed policy, as inflation remains at 3.7% and market analysts warn that a lack of clear communication could lead to increased volatility in bond and currency markets.
Brazilian Real Recovers Against US Dollar
The Brazilian real closed at R$5.1490 per dollar on August 25, marking its strongest performance in two weeks following a mid-August dip to R$5.2236. This currency movement occurred alongside the Central Bank’s monetary policy committee (Copom) decision to lower the Selic rate to 14.00% on August 5, representing the fourth consecutive cut in a cycle that reduced rates by a full percentage point since March. Despite the rate cuts and inflation forecasts for 2026 reaching 5.02%—above the 3% target center—market expectations for the dollar remained stagnant, with the Focus survey holding its year-end 2026 forecast at R$5.20 for ten consecutive weeks.
Paraguayan exporters criticize central bank amid currency volatility and labor strikes
On August 25, 2026, the Cámara Paraguaya de Exportadores (Capex) publicly criticized the Banco Central del Paraguay (BCP) for its handling of a 20% decline in the dollar against the guaraní over the preceding twelve months. Capex alleged that the BCP, which sold record volumes of dollars to curb depreciation between 2024 and 2025, stopped buying dollars in October 2025, creating an asymmetrical policy that eliminated export margins. Simultaneously, striking doctors in Asunción demanded a 76% pay rise, which the government estimated would cost US$100 million. Amid this economic tension, the government announced that 12 meat plants were cleared to export beef to Chile.
Investors turn to gold and crypto amid U.S. government spending concerns
Investors increasingly turned to gold and cryptocurrencies as concerns mounted regarding U.S. government spending, the budget deficit reaching a five-year high in July, and federal debt surpassing $40 trillion. Following the Treasury Department's decision to double bond buybacks to at least $4 billion, gold reached three-month highs while Bitcoin touched $80,000. Treasury Secretary Scott Bessent stated he holds a 'big toolkit' to manage bond market concerns, though market participants interpreted the weak dollar and lower Treasury prices as a signal of a 'debasement trade.'
Federal Reserve Chair Kevin Warsh to Speak at Jackson Hole Economic Symposium
Federal Reserve Chair Kevin Warsh was scheduled to deliver his first keynote address at the Jackson Hole Economic Symposium on Friday, 28 August, amid an environment where inflation had remained above the 2 percent target for more than five years. The symposium gathered approximately 120 central bankers from over 70 countries to discuss financial innovation and policy. Markets shifted their expectations toward a potential September rate increase, driven by energy costs linked to the Iran conflict and 30-year Treasury yields surpassing 5.3 percent. Warsh’s known skepticism toward forward guidance and his ongoing external review of the Fed's policy framework contributed to uncertainty regarding the direction of future monetary policy.
Gold prices rise amid dollar weakness and U.S. Treasury bond buyback plans
Gold prices climbed 0.6% on Tuesday to $4,677.19 per ounce, reaching a three-month high driven by a 0.8% decline in the U.S. dollar index and stabilized Treasury yields resulting from government buyback plans. UOB noted that gold is currently on track for its strongest monthly gain since September 1999, rising over 15% in August, while silver prices also saw a 0.4% increase. Investors monitored these movements ahead of U.S. Federal Reserve Chair Warsh’s upcoming speech at the Jackson Hole Symposium to gauge the future trajectory of interest rates.
Public interest in Giancarlo Devasini rises as Bitcoin value increases
A recent surge in Bitcoin value, which pushed the cryptocurrency above $79,000, prompted renewed interest in Giancarlo Devasini, the chairman of Tether and now Italy's wealthiest individual with a fortune estimated at $89.3 billion. Devasini built his wealth through his approximately 45% stake in Tether, the issuer of the stablecoin USDT, which reported over $10 billion in profits for 2025 and held over $122 billion in direct US Treasury securities by the end of that year. While Devasini transitioned from a career in medicine to digital finance, he remained largely removed from the public eye compared to Tether CEO Paolo Ardoino. This wealth shift marked the first time since 2007 that someone outside the Ferrero family held the title of Italy’s richest person.
Canadian dollar falls amid concerns of US-Canada trade tensions
On Saturday, the United States imposed 50% tariffs on approximately $20 billion worth of Canadian imports, following the collapse of trade negotiations between the two nations. In response, Canadian Prime Minister Mark Carney announced plans to implement dollar-for-dollar retaliatory tariffs on U.S. goods starting September 8, citing a need to defend Canadian sovereignty and industrial interests. The Canadian dollar subsequently fell 0.55% against the U.S. dollar on Monday morning as markets reacted to the escalating trade tensions. The conflict emerged after both sides failed to reach an agreement regarding the USMCA renegotiations, with disagreements focused on sectors such as autos, steel, and agricultural trade.
Treasury yields fall ahead of Kevin Warsh's Jackson Hole speech
Treasury yields moved lower on Monday, with the 10-year note falling more than 2 basis points to 4.7120% and the 30-year note dropping more than 2 basis points to 5.2497%. Investors adjusted positions ahead of Federal Reserve Chair Kevin Warsh's upcoming keynote speech at the Jackson Hole Symposium, where persistent inflation and the U.S. national debt of $40 trillion remain focal points. The movement followed previous trading sessions where yields on 10-year and 30-year notes had increased by more than 3 basis points.
Bitcoin Reaches $77,755 Amid Latin American Market Activity
Bitcoin closed at US$77,755 on August 23, 2026, marking a 0.87% daily gain following a 22% weekly increase driven by US debt-policy shifts, a US$1.14 billion short-liquidation cascade, and President Trump's support for the CLARITY Act. While the market rally focused on major digital assets, Latin American crypto activity remained centered on stablecoins, which accounted for 98% of Brazil’s Q1 2026 crypto purchases and dominated salary and remittance flows in Argentina and El Salvador. Despite Bitcoin's price momentum, stablecoins remained the primary tool for dollar access across the region.
Colombian Peso Reaches Seven-Year High Against the Dollar
The Colombian peso reached its strongest level against the dollar since October 9, 2018, with the official Tasa Representativa del Mercado (TRM) set at 3,048.12 for the weekend of August 22–24. This marked a 2.57 percent increase in the peso's value over the week, driven by domestic fiscal measures including a COP 60 trillion (US$19.7 billion) spending freeze and plans to reopen hydrocarbon exploration, alongside a 12 percent policy interest rate set by Banco de la República. External factors also contributed to the shift, as the dollar index touched a three-month low near 98.50, fueling gains for currencies across the region.
Economic Outlook and Market Events: Week of August 24–28, 2026
The week of August 24–28, 2026, focused on inflation, labor, and activity data across Latin America, with Brazil and Mexico serving as the primary drivers for regional market shifts. Brazilian data included the BCB Focus readout, consumer confidence, mid-month IPCA CPI, and various labor and supply price indicators, while Mexico reported on CPI, economic activity, and trade. These domestic releases were supplemented by external US economic signals, specifically consumer confidence and jobless claims, which dictated global rate repricing and risk appetite. The week served as a key assessment period for determining how persistent price pressures and domestic demand would influence regional central bank easing cycles.
Brazil Stock Market and Currency Performance for August 21
On August 21, Brazil's Ibovespa index rose 1.85% to close at 171,032 points, marking its strongest single-day advance in the current recovery period. The Brazilian real strengthened 1.04% against the US dollar to 5.1437, reflecting increased foreign interest in Brazilian assets. The rally was driven by major financial institutions, with Bradesco rising 3.1%, Itaú increasing 2.9%, and Banco do Brasil gaining 2.2%. While the session provided broad-based relief, the index remained 13.9% below its 52-week high, signaling that the move represented a recovery rather than a definitive trend reversal.
Mexico Markets: IPC and Peso Update for August 22, 2026
Mexico’s S&P/BMV IPC index rose 1.36% to close at 65,224 points on August 22, 2026, while the peso strengthened 0.36% to 16.895 per dollar. The rally was primarily driven by the mining sector, specifically Grupo México, which jumped 6.2% as copper prices increased due to global supply concerns. Conversely, the retail sector weakened, with Walmex falling 2.1% as investors rotated capital into cyclical mining and materials assets. The peso’s performance remained supported by the interest rate differential between Mexico’s 6.5% benchmark rate and lower US policy rates.
US Treasury Department Issues Report on Major Trading Partners
The US Treasury Department released a 59-page report titled “Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States,” which identified China, Japan, Korea, Taiwan, Thailand, Singapore, Vietnam, Germany, Ireland, and Switzerland as countries under monitoring for potential currency manipulation. The report stated a commitment to monitoring and combating unfair currency practices that allegedly provide an unfair trade advantage to the detriment of American economic strength. Despite these concerns, the US participated in a coordinated currency market intervention with Japan in late July to support the yen, which had been declining following the inauguration of Prime Minister Sanae Takaichi.
US bond selloff continues despite Treasury intervention
US 30-year Treasury yields rose to 5.24% on August 20, 2026, despite Treasury Secretary Scott Bessent’s pledge to potentially expand bond buyback programs beyond the previously announced doubling of efforts. The selloff persisted as major US indices declined, including a 1.3% drop in the Dow, while global markets reacted with varied performance. Analysts cited factors such as high oil prices linked to the conflict with Iran, heavy corporate issuance, increased government debt, and uncertainty regarding the policy approach of new Federal Reserve Chair Kevin Warsh.
Gold and silver prices rise amid US debt concerns and interest rate outlook
Gold and silver prices rebounded in August 2026, with gold reaching $4,466 per ounce and silver climbing to $66 after significant mid-year declines. This movement followed the US Treasury’s decision to double long-term debt buybacks to $4 billion per operation to stabilize bond markets, coinciding with reports that the US national debt surpassed $40 trillion. Additionally, soft economic data regarding jobs, retail sales, and inflation reduced the probability of a September interest rate hike to roughly one in three, increasing the relative attractiveness of non-yielding precious metals.
Ethiopian Birr Falls to Record Low Following $500 Million Central Bank Sale
The Ethiopian birr weakened to a record low of approximately 162 per dollar, prompting the National Bank of Ethiopia to announce an unscheduled special auction of US$500 million on 20 August. This single sale matches the total amount the central bank had previously scheduled for its entire quarterly allocation. The intervention followed a 12 August auction where 28 banks bid US$470.17 million for an available US$125 million, demonstrating a sharp rise in demand and bank participation since June. According to Bloomberg, the central bank has spent roughly US$2.2 billion this year to defend the currency, which currently stands as the worst performer among 23 tracked African currencies.
US Treasury actions to lower bond yields impact stocks and dollar
On August 19, 2026, U.S. stock markets rose and the dollar fell after the U.S. Treasury announced it would at least double its sovereign bond buybacks to lower 30-year bond yields. This intervention was intended to mitigate the impact of rising borrowing costs, which had threatened to stifle economic growth and hinder tech companies reliant on financing for AI investments. The Treasury's move followed recent market volatility fueled by concerns over ballooning government deficits and ongoing hostilities in the US-Iran war, which have restricted tanker traffic in the Strait of Hormuz and stoked inflation fears. Meanwhile, Federal Reserve minutes revealed that some policymakers favored interest rate hikes if inflation remains elevated, despite current business investment being heavily concentrated in the AI sector.
Analysts identify factors that could influence future U.S. dollar valuation
Currency strategists from Saxo, Societe Generale, and Deutsche Bank identified fiscal risks, softening U.S. economic data, and ambiguous Federal Reserve policies as factors that could pressure the U.S. dollar, despite its year-to-date gain of 1.15%. While higher Treasury yields previously bolstered the greenback, experts such as Saxo's Charu Chanana noted that yields now increasingly reflect government borrowing and risk premiums rather than economic growth. Societe Generale’s Kit Juckes observed that investors reduced bullish dollar positions following weaker consumption, inflation, and employment data. Meanwhile, Deutsche Bank’s George Saravelos cited mixed signals from Fed Chair Kevin Warsh regarding inflation targets and the potential for increased usage of the FIMA repo facility as additional dollar-negative risks.
Dollar remains steady as US economic data influences interest rate expectations
The U.S. dollar remained mostly flat against major peers on August 18 as investors scaled back expectations of a Federal Reserve interest rate hike following softer domestic economic data, including unexpected job losses and mild inflation readings. Market pricing for a September interest rate hike shifted, with a nearly 70 percent probability now favoring a hold. Concurrently, global markets faced inflationary pressure and rising bond yields, with U.S. 30-year Treasury yields reaching their highest levels since 2007, driven by concerns over the ongoing U.S.-Iran conflict and the continued closure of the Strait of Hormuz.
30-year U.S. Treasury yield reaches 19-year high
On Monday, the 30-year U.S. Treasury yield rose above 5.311%, marking its highest level since June 2007. The Treasury Department reported that major foreign holders, including the U.K., China, and Japan, decreased their Treasury holdings in June, while recent auctions for long-duration debt showed signs of tepid demand. Fundstrat strategist Mark Newton and BMO analysts attributed this movement to a global repricing of borrowing costs, influenced by rising yields in Japan and fiscal concerns across multiple developed nations.
Bolivia negotiates IMF loan, adopts floating currency, and reports export growth
Following his inauguration on 8 November 2025, President Rodrigo Paz Pereira initiated a significant economic reset in Bolivia, including a move to a floating currency on 15 July 2026 and a staff-level agreement for a US$1.9 billion IMF loan on 29 July 2026. This transition replaced a long-standing fixed exchange rate of approximately 6.91 bolivianos per dollar, resulting in the official rate reaching 11.58 per dollar by mid-August while the black-market rate dropped below the official rate. Although export values rose 55% to US$6,395 million during the first half of 2026, the volume of exports actually declined by 19% as natural gas revenue continued to decline. The administration now faces the requirement of obtaining final approval from the IMF board and the Bolivian Congress to finalize the loan.
Mexican Peso Reaches Strongest Level Against US Dollar Since 2024
On August 14, 2026, the Mexican peso strengthened against the US dollar, trading intraday at approximately 16.98, marking its first dip below the 17 psychological threshold since mid-2024. This movement followed the Banco de Mexico's August 6 decision to maintain its benchmark interest rate at 6.50%, which sustained a wide interest-rate gap between the peso and the dollar. President Claudia Sheinbaum attributed this economic trend to her administration's economic plan and record-breaking foreign direct investment of US$23.591 billion in the first quarter of 2026. However, official data revealed that 94% of these investment inflows consisted of reinvested earnings rather than new capital.
US dollar falls after retail sales report shows unexpected decline
The U.S. dollar index fell 0.33 percent to 99.59 on Friday following a report that U.S. retail sales unexpectedly declined by 0.6 percent in July. Market participants responded to this data as evidence of an economic slowdown, with traders reducing the probability of a Federal Reserve rate hike in September to 31 percent. Concurrently, the Japanese yen strengthened by 0.32 percent to 158.97 per dollar amid expectations that the Bank of Japan will raise interest rates as soon as next month to support the currency.
Gold prices face pressure from inflation concerns and oil market trends
Gold prices retreated below $2,400 after reaching their highest level since June 5, as investors took profits following recent gains. Analyst Areerat Mauracha of PACG Ltd. noted that the market shifted its focus to inflation risks stemming from higher oil prices, which could impede the Federal Reserve's ability to ease monetary policy despite weak US non-farm payroll data. Meanwhile, central bank and fund buying continued, with China's central bank purchasing 19.9 tonnes of gold in July and the SPDR Gold Trust ETF increasing its holdings by 3.42 tonnes.
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