The dollar spiked against major currencies on Monday. The currency recovered from the day’s low supported by Federal Reserve officials statement that additional interest rate hikes are likely given that inflation remains persistently high and the labor market is still tight.
Fed Governor Michele Bowman said on Monday additional interest rate hikes will likely be needed to lower inflation to the U.S. central bank’s 2% target.
The dollar index struggled for direction and settled at 102.076 up 0.07%.
Gold had a volatile trade and settled at 59420, down 0.18%. Silver retreated from the day’s high 72352 and settled at 71268, down by 1.67%. Copper had a range bound trade and settled at 737.45, down by 0.36%. Crude oil retreated slightly by 1.67% and settled at 6808.
Economic data released yesterday
· China’s foreign exchange reserves rose more than expected in July, official data showed on Monday, as the dollar fell against other major currencies. The country’s foreign exchange reserves – the world’s largest – rose $11.3 billion to $3.204 trillion last month, compared with $3.200 trillion tipped by a Reuters poll of analysts and $3.193 trillion in June.
· Eurozone Sentix’s index for the euro zone rose to -18.9 points in August from -22.5 in July, beating expectations of analysts polled by Reuters of a further drop, to a reading of -24.3.
Economic data and events to watch today
China
Time Tentative –
Trade Balance. Forecast is 495B from 491B.
USD-Denominated Trade Balance. Forecast 70.8B from 70.6B.
Both data could have a volatile impact on the Dollar.
Japan
At 9.05am – 30-y Bond Auction
10.30am – Economy Watchers Sentiment. Forecast is 54.00 from 53.6.
Above data could have a neutral impact on Yen.
Eurozone
At 11.30pm – German Final CPI m/m. Data is foreseen at 0.3% from previous 0.3%.
At 12.15pm – French Trade Balance. Data is foreseen at -8.0B from previous -8.4B.
All above data could have a volatile impact on the Euro.
Canada
At 6.00pm – Trade Balance. Data is foreseen at -2.8B from -3.4B.
Above data could have a positive impact on the Canadian dollar.
U.S
At 6.00pm – Trade Balance. Data is foreseen at -65.1B previous was at -69.0B.
At 7.30pm – Final Wholesale Inventories m/m. Data is foreseen at -0.3% previous was at -0.3%.
Tentative – IBD/TIPP Economic Optimism. Data is foreseen at 43.0 previous was at 41.3
Above data could have a volatile impact on the dollar.