News

Dollar Trims Losses Ahead of Economic Data

USD

The dollar index, which measures the strength of the United States dollar against a basket of the world's major currencies, inched higher to 90.17, to test the falling trendline formed by combining the clear peaks since April 1st. Investors are bracing themselves for stronger economic figures, whether the second reading of the first quarter GDP today or the Fed's favorite inflation gauge the PCE Index tomorrow. Upbeat figures could ease the pressure on the dollar, as they push yields higher along with chances of tapering sooner. An ultimate scenario for the dollar would be strong figures this week, and outstanding May jobs report. Currently, the EURUSD is trading near $1.22, and the GBPUSD hovered near $1.4125.

Equities

Futures tied to major US stock indices drifted lower ahead of data. A strong inflation reading could push the Fed to alter its current policy path, while Biden's administration is looking for taxes to fund its expenditure plans. The Dow Jones Industrial Average futures fell to 34168, the S&P500 futures dipped to 4176, and Nasdaq futures declined to 13619.

Metals

Precious metals prices retreated a little as the dollar picked up the pace along with Treasury yields ahead of GDP and inflation figures. The price of a gold ounce faltered at $1912, the highest since early January, the price of a silver ounce dipped to $27.70, while palladium held steady near 2770.

Oil

Oil prices surrendered partial gains despite a drop in inventories. The US Energy Information Administration reported a decline of 1.662 million barrels. However, the market is focusing on the developments of the nuclear deal negotiations. The headlines on progress last week led to a drop of more than 8%, then when obstacles were reported the benchmarks, prices recovered. Currently, the West Texas Intermediate July contract is trading near $65.80, and the Brent blend August contract is hovering above $68.

Major Economic Events

GMT Country Event Expectation Previous

12:30

US

 Durable Goods Orders (MoM) (Apr)

0.7%

1.0%

12:30

US

 GDP (QoQ) (Q1) 

6.50%

6.40%

12:30

US

 Initial Jobless Claims

425

444

14:00

US

 Pending Home Sales (MoM) (Apr)

0.8%

1.9%

 

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