Foreign Exchange Market Update

August 28, 2026

Chicago Business Barometer Plunges to Eight-Month Low in August

Chicago-area business activity showed a sharp pullback in August; the Chicago business barometer plunged from 57.6 in July to 47.1 in August, with a reading below 50 indicating contraction. With the slump, the Chicago business barometer returned to contraction territory for the first time since April and hit its lowest level since December.

The steep drop by the Chicago business barometer was driven by declines in the new orders, order backlogs, production, and supplier deliveries indexes. The new orders index plummeted by 15.4 points, the order backlogs index tumbled by 12.1 points, and the production index slumped by 8.8 points. The order backlogs and production indexes dropped to their lowest levels since November, with the production index recording its first contractionary reading since December. The supplier deliveries index also eased by 2.6 points but remained in expansionary territory for the nineteenth consecutive month.

Meanwhile, the employment index climbed by 4.3 points to its first expansionary reading in five months, providing some positive offset. The prices paid index also rose by 3.8 points to its highest level since February 2022. 08/28/2026 - 10:15:00 (RTTNews)

Eurozone

Euro traded at 1.1603 against USD at 9:00 AM PST

Germany's unemployment rate remained unchanged in August. The jobless rate held steady at 6.4% in August. At the same time, the number of people out of work increased by 4,000 compared to 6,000 in July. The unemployment rate remained unchanged at 4.0% in July. The number of unemployed increased by 11,000 or 0.6% to 1.74 million in July. 08/28/2026 - 09:22:00 (RTTNews)

Spain inflation hit the highest level in more than three years in July, largely reflecting higher energy prices. Consumer price inflation rose from 3.6% in July to 4.3%. The rate was seen at 4.2 %. The latest figure was the highest since February 2023, when inflation was 6.0 %. Likewise, EU harmonized inflation advanced from 3.9% to 4.5%. Meanwhile, core inflation that excludes prices of unprocessed food and energy softened from 3.0% to 2.9%.

Month-on-month, the consumer price index posted an increase of 0.7%. The harmonized index of consumer prices (HICP) climbed 0.6% after staying flat in July. Retail sales declined for the first time since November 2022. Retail sales dropped 0.3% from a year ago in July, following June's 0.6% rise. Monthly, retail sales slid 0.9% after rising 0.3% in June. 08/28/2026 - 09:57:00 (RTTNews)

Confidence among Italian households remained less pessimistic in August as the level rose to the highest in six months, and business confidence continued to show some resilience. Consumer sentiment rose from 94.2 in the previous month to 94.5 in August. Nonetheless, a score below 100 indicates a pessimistic outlook.

Among components, both the economic and future sentiment improved from 90.9 to 92.3 and from 89.8 to 90.2. Similarly, the current conditions index rose from 97.4 to 97.8, while the personal sentiment remained stable at 95.4. The composite business confidence indicator climbed from 95.7 in July to a 5-month high of 96.9 in August. Manufacturing confidence strengthened slightly, with the corresponding indicator increasing from 89.7 to 89.9, driven by improved expectations on production and better assessments of inventories.

Confidence in the market services rose from 98.2 to 99.5, and the morale for the construction sector turned optimistic, with the respective index rising from 96.8 to 102.9 due to a more positive outlook regarding both employment expectations and order book assessments. 08/28/2026 - 07:32:00 (RTTNews)