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The U.S. Dollar Stands Tall

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The U.S. dollar surged vs. a basket of major currencies as the U.S. Non-farm payrolls jumped 222k in June, exceeding the forecast of 179k. In addition, the unemployment rate rose from 4.3% to 4.4%. The report signals the U.S. economy is healthy, which could keep the Federal Reserve on course for a third interest rate hike this year despite sluggish wage gains.

  • The U.S. dollar index (DXY), which measures the Greenback against a basket of currencies, was steady at 95.77.

EUR

The euro was little changed vs. the Greenback, with EUR/USD at 1.1403.

This week, market will focus on the testimony of Fed Chair Janet Yellen, as she is scheduled to testify before Congress on July 12 and 13. Her topic will be U.S. Federal Reserve Monetary Policy.

JPY

Dollar-Yen pair settled at a two-month high as Friday’s jobs report signaled that the Federal Reserve could   stick to plans for a third rate raise this year. U.S. dollar rose as much as 0.32, its highest level since May 11. Japanese Yen also declined as data showed that Japan's May machinery orders unexpectedly fell for the first time in eight months in May, increasing doubts that the economic recovery is losing momentum. 

GBP

The Sterling pound declined to its lowest rate since June 28 on Friday, before recovering to $1.29 at the beginning of the week. Cable fall on the back of some soft manufacturing production data from the UK which went against expectation and a slightly stronger dollar which was brought about by a better than expected Non-Farm Payroll data.

Gold

Gold prices edged lower at the beginning of the week, near its four-month lows, after a stronger than expected US jobs data influenced the market. Such a strong data could reinforce anticipation of another interest rate rise in the U.S. Spot gold fell as much as 0.2% to settle at $1,210.94 per ounce at 0433 GMT. Technically, the yellow metal could decline further to $1,204 per ounce.

Oil

Oil prices rose at the start of the week after a 3% decline in the previous session, but markets still under pressure from high drilling activity in the United States and due persistent oversupply worries. Meanwhile, Brent crude futures, 0.2% or up 9 cents, from their last close, to settle at $46.80 per barrel at 0703 GMT, while U.S. WTI crude futures were at $44.33.

The most important economic events:

  • USD Consumer Credit (MAY): (GMT 19:00) – Medium – Forecast ($13.350b) – Previous ($8.197b).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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