Markets await OPEC meeting

Markets await OPEC meeting



The greenback remained weak leading up to the FOMC statement. On Monday, the currency traded near a 13-month low vs. its major peers as Donald Trump’s domestic agenda could take a while to be approved, due to the recent US political turmoil.

The U.S. dollar was also hammered by doubts over the Federal Reserve's policy for a third rate raise this year. Meanwhile, investors are anticipating the Federal Reserve's July 25-26 meeting for an update on its policy to start normalizing its balance sheet. Traders do not anticipate a rate change but there may be a less than upbeat outlook. Today, the flash manufacturing and services PMI data are in queue.

  • The U.S. dollar index (DXY), which measures the Greenback against a basket of major currencies, was little changed at 93.887, after touching 93.823, its lowest since June 2016.


The single currency held on to its gains against the greenback but retreated against its Japanese counterpart owing to BOJ dovishness. The Euro traded slightly higher at $1.1669, after touching its highest levels in almost two years.  Today, the services and manufacturing PMI data is on tap.


Downbeat CPI figures weighed on the Bank of England’s rate hike prospects, consequently making the pound sterling one of the weaker performers in the market. The public sector borrowing data also came in weaker than what was anticipated. No reports from the UK economy are due today.


The Japanese Yen held steady vs. its major rivals as Japan preliminary manufacturing PMI for July declined for the second straight month to 52.2, its lowest reading since November 2016, from 52.4 in the previous month. However, JPY rose as much as 0.02% vs. the USD to settle at  ¥110.965, the highest levels in five weeks. The flash manufacturing PMI is due today.


Earlier today, Gold prices fell slightly amid expectations that the Fed could set the tone later this week. Last week, the yellow metal notched up the largest weekly gain in 60-days as the Greenback declined to its lowest levels since June 22, 2016. Gold for August delivery fell as much as 0.04%, to settle at $1,254.48. However, the precious metal was up by 1.97% last week. 


Today, oil prices rose amid strong anticipations that the upcoming meeting between oil ministers of the Organization of the Petroleum Exporting Countries (OPEC) and their counterparts from the non-OPEC countries in the Russian city of St Petersburg could provide much-required stability to oil prices.

In fact, Today’s meeting is critical as it could discuss increasing output in Libya and Nigeria. Meanwhile, London Brent crude for September delivery rose as much as 24 cents to settle at $48.30.

The most important economic events:

  • EUR Markit Eurozone Composite PMI (Jul P): (GMT 08:00) – Medium – Forecast (56.2) – Previous (56.3).
  • USD Markit US Manufacturing PMI (Jul P): (GMT 13:45) – Medium – Forecast (52.2) – Previous (52).

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