News

Dollar Index Races Higher, GDP Figures Eyed

USD

The dollar index which measures the greenback against a basket of major currencies extended its daily winning streak to three by closing at 98.21. The growing risks and uncertainties in Europe are supporting the flow to dollar safety. The ongoing clash between Italy and the European Commission over the budget weighed on the euro, and the Brexit deadlock pressured the sterling, knowing that these two currencies alone account for almost 70% of the dollar index basket. Market participants await the release of the second reading of the first quarter GDP figures from the United States. The preliminary reading showed that the US economy grew by 3.2% in the first quarter while the GDP Price Index came in at 0.6%, sharply lower than the estimates. Today's economic figures along with the PCE report tomorrow could define the dollar trend for the coming weeks.

Metals

Metals prices drifted lower as the dollar edged higher and Treasury yields bounced sharply off the lows. The price of a gold ounce dropped to a low of $1275, the silver ounce dropped to $14.35, while palladium hovered near $1340.

Oil

Oil prices inched higher after a sharp drop in private oil data. The American Petroleum Institute reported that the weekly US crude oil stock dropped by 5.265 million barrels last week. The official numbers will be released by the US Energy Information Administration later today. The West Texas Intermediate bounced-off a two-and-a-half month low of $56.88 to trade higher at $59.45 threatening this week's high, and Brent futures rose to $69.92.

Major Economic Events

GMT Country Event Expectation Previous

12:30

US

GDP (QoQ) (Q1)

3.1% 3.2%

12:30

US

GDP Price Index (QoQ) (Q1)

0.6% 0.6%

12:30

US

Initial Jobless Claims

216 211

14:00

US

Pending Home Sales (MoM) (Apr)

0.9% 3.8%

15:00

US

Crude Oil Inventories

-0.857 4.74

 

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