US dollar index falls on yuan’s second devaluation
The US Dollar Index fell by nearly 1% as the basket of currencies that the US dollar is weighed against posted gains. The second round of the yuan’s devaluation happened on August 11, 2015. After, the US dollar fell against other major currencies in the US dollar index’s basket, like the euro and the pound. The downtrend, which started with the second devaluation by the People’s Bank of China, continued through the day.
William Dudley speech and crude inventory data
William Dudley is the president of the Federal Reserve Bank of New York. In his speech on August 12, 2015, he said that there could be a huge implication for the economy because of the Chinese yuan devaluation, which calls for close monitoring. The slightly dovish tone of his speech meant that the US dollar index continued to fall. Later in the day, US commercial crude oil inventories data came out. Inventories fell by 1.7 million barrels in the week ended August 7, 2015, versus traders’ expectation of a dip of 1.6 million barrels. After the crude inventory data, the US dollar index ticked up slightly.
Impact on the market
Oil producing companies also traded higher. The Abraxas Petroleum Corporation (AXAS) was up 4.35%. Others companies like Kosmos Energy (KOS) and Exxon Mobil Corporation (XOM) also showed positive movements of 2.45% and 1.68%, respectively.