News

Dollar Rallies on Upbeat Economic Data

USD

The dollar index, which measures the greenback against a basket of major currencies extended gains rising to a high of 97.44 on upbeat economic data. The retail sales rose by 0.4% in June to beat estimates of 0.1% and signal that the US economy is still solid and outperforming rivals. The Federal Reserve Chairman reiterated that the Fed would act as appropriate to sustain the longest expansion in US history, while Fed's Evans stated that a 50 basis point rate-cut in July would help to reach the needed results faster. DXY also gained from the falling euro and pound. The economic data from the Eurozone continued to weaken with the ZEW numbers showing that the mood of German investors is still worsening. Meanwhile, the sterling tumbled as the leadership contestants, Boris Johnson and Jeremy Hunt, raised the stakes with the EU on no-deal Brexit. The EURUSD dropped to a one-week low of $1.12, the GBPUSD tumbled to a twenty-seven-month low of $1.2382, and the USDCHF rose to 0.9894.

Metals

The price of a gold ounce moved lower to find support near $1400 as the dollar ticked higher on upbeat data. The recent economic data coming out from the United States are showing that the US economy is still solid and weighing on the chances of aggressive easing by the Federal Reserve. Meanwhile, the price of a silver ounce climbed to $15.68, the highest since late February; and palladium declined to a three-week low of $1507.

Oil

Oil prices fell sharply on Trump's comment. He stated that there is progress between the United States and Iran, which signaled to investors that the geopolitical tensions could ease. On the other hand, Oil companies in the Gulf of Mexico are restoring their output activity after hurricane Barry. The West Texas Intermediate crude futures plunged to a ten-day low of $57.06, and Brent futures declined to $63.83. Market participants await the weekly oil report from the US Energy Information Administration.

Major Economic Events

GMT Country Event Expectation Previous

8:30

UK

CPI (YoY) (Jun)

2.0%

2.0%

9:00

EU

CPI (YoY) (Jun)

1.2%

1.2%

12:30

US

Building Permits (Jun)

1.300

1.299

12:30

CA

Core CPI (MoM) (Jun)

 

0.4%

14:30

US

Crude Oil Inventories

-2.694

-9.499

18:00

US

Beige Book

 

 


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