Dollar soft, Asia mixed as Dow's 700-point slide lingers
As of 2026-08-21 12:00 SGT
Key points
- The Dow tumbled more than 700 points Thursday as Treasury yields rebounded, erasing the lift from Treasury Secretary Bessent's expanded bond buyback plan.
- USD/JPY is little changed at 158.99 (-0.02%), holding inside Thursday's 159.13/158.86 range.
- The PBOC set today's official USD/CNY reference rate at 6.7817, well above the Reuters estimate of 6.7262 — a notably weaker fixing than expected.
- The Nikkei is heading for its worst week in a month on oil-driven inflation fears, while South Korea's KOSPI has clawed back early losses on chipmaker strength.
- Gold is holding above $4,500 and Bitcoin has climbed to $74,583 (+2.15%) amid growing concern over US fiscal credibility.
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 158.99 | -0.02% |
| EUR/USD | 1.1697 | +0.14% |
| Nikkei 225 (intraday) | 65,922 | -0.44% |
| Hang Seng (intraday) | 25,892 | +1.56% |
| Dow futures | 52,868 | +0.04% |
| S&P 500 futures | 7,668.25 | +0.08% |
| Nasdaq 100 futures | 29,356 | +0.19% |
| Gold futures | 4,588.00 | +0.36% |
| WTI crude | 86.59 | -0.28% |
| Bitcoin | 74,583 | +2.15% |
| US 10-yr yield | 4.696% | +4.3bp |
Foreign exchange — Dollar soft, yuan fixed weaker than expected
The dollar remains on the back foot, with the Dollar Index hovering around 99.70-99.75 and near a three-month low, according to FXStreet. USD/JPY is little changed at 158.99 (-0.02%), staying inside Thursday's 159.13-158.86 range as the 10-year Treasury yield's rebound to 4.696% offers the yen some support even as broader dollar softness caps the pair. In China, the PBOC set today's official USD/CNY reference rate at 6.7817, notably above the Reuters estimate of 6.7262 — a weaker-than-expected fixing even as the dollar trades broadly soft. EUR/USD ticked up to 1.1697 (+0.14%). Through the rest of the Asian session, a soft dollar and a rangebound yen look set to keep USD/JPY capped below 159.
Equities — Asia mixed, US futures steady after Thursday's rout
US index futures are little changed after Thursday's steep sell-off, with Dow futures up 0.04%, S&P 500 futures up 0.08% and Nasdaq 100 futures up 0.19%. In Asia, the Nikkei is on track for its worst week in a month as Middle East-driven oil gains stoke inflation worries, while the Hang Seng is up 1.56% intraday. South Korea's KOSPI has clawed back early losses to trade higher on chipmaker strength. Into tonight's US cash open, chip-led dip-buying looks likely to offset lingering caution over yields.
Macro — Yield rebound wipes out buyback relief
The Dow fell more than 700 points Thursday, with the S&P and Nasdaq also lower, as the 10-year Treasury yield rebounded to 4.696%, wiping out the relief that followed the Treasury's move to double its debt-buyback capacity. Fed independence remains a live issue, with Kevin Warsh facing scrutiny over the central bank's turf even as Bessent pushes further into Treasury market operations. As European trading gets underway, the yield backdrop should stay the dominant driver of risk sentiment.
Commodities — Gold firm above $4,500, oil consolidates
Gold is holding above $4,500 and is on track for a third straight weekly gain, per FXStreet, as reduced Fed hike bets offset the drag from higher bond yields. WTI crude is at $86.59 (-0.28%), consolidating within Thursday's $85.94-$84.57 range, still underpinned by the US-Iran standoff. Bitcoin has climbed to $74,583 (+2.15%). Heading into the NY open, gold's debasement-trade bid looks intact.
Geopolitics — Washington ramps up pressure on Iran
The Trump administration is escalating economic pressure on Iran, with Bessent saying a large-scale military restart is unlikely even as sanctions pressure intensifies, and Trump vowing "Economic D-Day" consequences for Iran's backers. Into the weekend, the standoff should keep an underlying bid in place for oil and gold.
Upcoming events
| Time (SGT) | Region | Event | Focus |
|---|---|---|---|
| 08/21 14:00 | UK | Retail Sales m/m (forecast -0.5%) | Gauge of consumer spending |
| 08/21 15:15 | EU | French Flash Manufacturing PMI (forecast 50.1) | Early read on eurozone factory activity |
| 08/21 15:30 | EU | German Flash Manufacturing PMI (forecast 52.1) | Confirms whether Germany's manufacturing recovery holds |
| 08/21 15:30 | EU | German Flash Services PMI (forecast 50.1) | Domestic demand check |
| 08/21 16:30 | UK | Flash Services PMI (forecast 51.8) | UK growth momentum |
| 08/22 07:00 | US | President Trump Speaks | Watch for Iran policy signals |