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Dollar bounced-off a two-week low as Yields Soar

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USD

The dollar index which measures the strength of the greenback against a basket of currencies bounced-off a two-week low of 94.21 to settle at 94.63. Despite the criticism of President Donald Trump about the impact of a stronger dollar and a higher interest rate on the US economy, the US 10-year treasury yields jumped to a five-week high of %2.965. The robust outlook of the United States economy supports the monetary policy stance of the Federal Reserve and leads to higher yields. The USDJPY rose from a low of 110.76 to trade at a high of 111.50 during the Asian session. EURUSD retreated from a two-week high of $1.1750 to trade at a low of $1.1655 ahead of the European session. Moreover, the USDCNY reached a thirteen-month high of 6.82. President Donald Trump stated earlier that the Chinese Yuan is falling like a rock, and that China is manipulating the currency rate. In the last four months, the Yuan depreciated more than nine percent.

Metals

Gold prices dropped from a one-week high of $1235 to erase Friday’s gains. The gold ounce settled at $1224 and traded at a low of $1218 during the Asian session. Moreover, the silver ounce ended the day lower at $15.35.

Oil

Oil prices ended the day slightly lower due to the oversupply worries. West Texas Intermediate and Brent rose to a high of $69.28 and $74.47 respectively supported by the clash between Trump and Ruhani. However, the risk of oversupply erased earlier gains. G20 finance leaders on the weekend addressed the risks to global growth from the rise of trade tensions which will affect the demand for oil. The American Petroleum Institute (API) will report the US weekly crude oil stock.

Major Economic Events

GMT Country Event Expectation Previous
13:45 US Manufacturing PMI (Jul)  55.1 55.4
13:45 US Services PMI (Jul) 56.5 56.5
20:45 US API Weekly Crude Oil Stock   0.629

 
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