Dollar Index Falters Ahead of FOMC Minutes

Dollar Index Falters Ahead of FOMC Minutes


The dollar index which measures the greenback against a basket of major currencies retreated from a three-week high of 98.45 to settle lower at 98.15 as yields gave up earlier gains. The US 10-year yields dropped to 1.537% after posting a high of 1.626%. Market participants are looking forward to the release of the Minutes of the last Federal Open Market Committee meeting where the Fed lowered interest rates by 25 basis points for the first time since the financial crisis. Moreover, the Jackson Hole Symposium is on investors' radar as they are waiting for Powell's comments on the latest yield curve inversion, and searching for clues on the future of interest rates. On the other hand, the resignation of Italy's PM and the comments of Angela Merkel concerning the Backstop lifted both the euro and the pound against the dollar. The EURUSD climbed to a high of $1.1106, and the GBPUSD surged to $1.2180.


Gold prices edged higher as the greenback faltered at a three-week high and US Treasury yield gave up earlier gains. The price of a gold ounce rose to $1508 after bouncing from the support zone of $1493, the price of silver ounce climbed to $17.17, and palladium soared to $1500.


Oil prices continued to trade sideways-up as market participant awaited fresh fundamental drivers. The uncertainty arising from the trade disputes between China and the United States is shifting to the oil demand outlook, which is capping gains. On the other hand, the American Petroleum Institute reported that the weekly crude oil stock rose by 3.5 million barrels last week, and investors are looking forward to the official numbers by the US Energy Information Administration. The West Texas Intermediate crude futures inched higher to $56.41, and Brent futures rose to a one-week high of $60.48.

Major Economic Events

GMT Country Event Expectation Previous
12:30 CA Core CPI (MoM) (Jul)   0%
14:00 US Existing Home Sales (Jul) 2.5% -1.7%
14:30 US Crude Oil Inventories -1.889 1.580
18:00 US FOMC Meeting Minutes     


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