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Dollar Remains under Pressures and Markets await Eurozone CPI

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USD

On Monday, The U.S. dollar was traded under pressure against a basket of major currencies and hovering near a two-and-a-half years low vs. the common currency, negatively affected by U.S. political uncertainty and uninspiring U.S. data that added worries about whether there will be another Federal Reserve rate rise before the year-end.

Among significant news events, the International Monetary Fund (IMF) said that the U.S. dollar was overvalued by 10% to 20%, based on U.S. near-term economic fundamentals.

  • The U.S. dollar index (DXY), which measures the Greenback against a basket of currencies, rose as much as 0.15% to settle at 93.396 pips, after Friday's 0.6% decline.

EUR

Data from the euro area was a bit of a mixed bag on Friday. The French and German CPI surpassed expectations while the French consumer spending fell behind. On the data front, we have the Flash CPI reading, which is projected to hold steady at 1.3%. German retail sales data is also due with a marginal increase of 0.1% forecasted.

GBP

No data was on tap in the United Kingdom on Friday. Today, we only have the net lending to individuals and mortgage approvals. Consequently, there really isn’t much in the form of volatility unless the BoE expectations are priced in by traders.

JPY

The Greenback traded under pressure vs. yen, with USD/JPY at ¥110.70, after touching a one-and-a-half month low of ¥110.31 overnight as tensions on the Korean peninsula boosted safe-haven demand for JPY. On the release front, investors are awaiting JPY Housing Starts (YoY) (JUN), which indicates the strength of Japan 's construction sector, as a higher than expected reading should be taken as positive for the Japanese Yen, while a lower than expected reading should be taken as negative for the Japanese Yen.

Gold

Earlier today, Gold prices settle around a near seven-week high lifted by tensions on the Korean peninsula, while the Greenback declined to multi-month lows due to weak data from the US economy. US gold futures for August delivery edged higher by 0.1% to $1,269.8, while Spot gold settled to $1,270.98. Technically, the yellow metal could break resistance at $1,270 and touch the next resistance level at $1,276.

Among significant news event, North Korea fired a missile on Friday that experts said was capable of hitting Los Angeles and other U.S. cities.

Oil

Oil prices rose to a two-month high, boosted by a decline in the U.S. oil crude market and the threat of sanctions against Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC). U.S. West Texas Intermediate (WTI) futures rose as much as 0.3% or 16 cents to settle at $49.87 per barrel, while Brent crude futures settled at $52.82. 

The most important economic events:

  • EUR Euro-Zone Consumer Price Index Estimate (YoY) (JUL): (GMT 9:00) – Important – Forecast (1.3%) – Previous (1.3%).
  • EUR Euro-Zone Consumer Price Index - Core (YoY) (JUL A): (GMT 9:00) – Important – Forecast (1.1%) – Previous (1.1%).

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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