The British pound extended losses against rivals as soft data raised rate-cut prospects. A series of economic indicators were disappointing and could force the Bank of England to lower interest rates by 25 basis points later this month. Currently, the CME BOE Watch Tool shows a probability of 72% the monetary policy committee will vote for a rate cut. Market participants are looking forward to the economic data to be released this week for further insight on the economic performance and interest rate path. The GBPUSD tumbled to $1.2970, the GBPJPY declined to 142.86, and the EURGBP edged higher to 0.8553.
The dollar index, which measures the greenback against a basket of major currencies, rose to a three-week high of 97.67, as the US economic outlook seems more stable than rivals. Despite the soft economic data released on Friday, the overall economic performance was strong compared to competitive economies. The CME Fed Watch Tool ruled out any interest rate cuts this year. The United States is on holiday today, which would affect market volatility. The EURUSD dropped to $1.1086, while the USDJPY continued to trade in a tight range near an eight-month high of 110.30.
Gold prices edged slightly higher despite a stronger dollar across the board. The price of a gold ounce traded at a high of $1562, the price of a silver ounce held steady above $18, while palladium soared to a fresh record high of $2523.
Oil prices kicked off the week on a positive gap as the Libyan conflict weighs on oil supply. The National Oil Corporation stated that two big oil fields started shutting down production as Libyan commander Khalifa Haftar blocked pipelines. This could decrease production by almost 800,000 barrels per day. The West Texas Intermediate crude futures rose to $59.60, and Brent futures jumped to $65.98.
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