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Dollar Index Retreats From 11-month High Post EU Migration Deal

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Equities

Major US indices bounced-off the lowest levels since May, as the trade tensions eased. Dow Jones found support at a low of 23997 and ended the session at 24267. The strong performance continued during the Asian session as the National Development and Reform Commission of the People’s Republic of China (NDRC) unveiled an easing of foreign investment curbs in different sectors that will take effect on July 28th.

USD

The dollar index that measures the greenback against a basket of six major currencies fell after the EU leaders announced that they reached a deal on immigration. Also, the third reading of the first quarter GDP came out at 2.0% versus an expectation of 2.2% and pressured the dollar ahead of the NY session. DXY dropped to a low of 94.76 after trading at a high of 95.54 yesterday.

EUR

EURUSD spiked to a high of $1.1664 due to the announcement of the migration deal. The EU summit will continue today to discuss reforms. Moreover, the preliminary release of the June CPI is due today.

 

Metals

Gold prices fell to $1246 yesterday, the lowest level since December 2017. However, gold took advantage of the dollar weakness to rebound to a high of $1252. Gold is on the course to post its worst monthly performance since November 2016. On the other hand, the silver ounce had the same scenario, where it bounced back to a high of $16.10 after trading at a low of $15.90 yesterday.

Oil

Oil prices rallied higher for the third consecutive day, as traders continue to weigh the supply disruption and geopolitical tensions. The West Texas Intermediate traded at a high of $74.03, the highest level since November 2014. Brent oil reached a one-month high of $78.38. The U.S. energy firm, Baker Hughes, will report the US oil rig count today.

Major Economic Events

GMT Country Event Expectation Previous
8:30 UK GDP (QoQ) (Q1) 0.1% 0.1%
8:30 UK GDP (YoY) (Q1) 1.2% 1.2%
9:00 EU Core CPI (YoY)  1.0% 1.1%
9:00 EU CPI (YoY) (Jun)  2.0% 1.9%
12:30 US Core PCE Price Index (YoY) (May) 1.9% 1.8%
12:30 CA GDP (MoM) (Apr) 0.0% 0.3%
17:00 US U.S. Baker Hughes Oil Rig Count   862

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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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