News

Dollar Rebounds On Solid Economic Data

USD

The dollar index, which measures the greenback against a basket of major currencies, rebounded from a two-week low of 96.57 to 97.01 on solid economic data. The ISM non-manufacturing PMI for June came in at 57.1, significantly beating estimates of 50.0, signaling that the economic activity is recovering rapidly. The EURUSD dipped to $1.1281, and the GBPUSD eased to $1.2467.

AUD

The Australian dollar drifted lower against peers following the Reserve Bank of Australia monetary policy meeting. The board kept interest rates unchanged at 0.25%, expressed commitment to scale up asset purchases if needed to support the economy, and maintained a 0.25% target on three-year bond yields. The AUDUSD dropped to $0.6935, and the EURAUD inched higher to 1.6271.

Equities

Major US stock index futures dropped during the Asian session as strong data weighed on the chances of further stimulus. The mounting prospects of more fiscal and monetary stimulus boosted the stock market in the past weeks. However, the economic indicators continue to show improvement in economic activity, giving policymakers more room to assess the situation further before introducing any easing measures. On the other hand, the rising coronavirus cases continue to weigh on investors' risk appetite. The Dow Jones Industrial Average futures fell to 25905, the S&P500 futures declined to 3144, and Nasdaq futures dipped to 10537.

Metals

Gold prices continued to hover near an eight-year peak awaiting fresh drivers. The solid economic data lowered the chances of further stimulus, but the soaring coronavirus cases lift the demand for safety. The price of a gold ounce is trading above $1780, the price of a silver ounce fell to $18.07, and palladium futures eased to $1928.

Oil

Oil prices continued to trade in a tight range near their highest levels since March. The rising coronavirus cases are capping any move higher, as investors are afraid that a significant outbreak could lead to another lockdown. On the other hand, OPEC+ agreed cuts are still providing support to the market. Market participants are looking forward to the US inventory data, which had a clear impact on the market last week, as data showed a sharp decline in inventories, signaling a pick-up in demand levels. The West Texas Intermediate August delivery fell to $39.97, and Brent Blend September delivery declined to $42.49.

Major Economic Events

GMT Country Event Expectation Previous

14:00

US

 JOLTs Job Openings (May)

4.850

5.046

20:30

US

 API Weekly Crude Oil Stock

-

-8.156

 

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