The U.S. dollar strengthened against other major currencies after minutes from the Federal Reserve’s June policy meeting reinforced market expectations of another interest rate hike at the end of July.
The majority of Fed officials predicted that policymakers would eventually need to tighten policy even more when they almost unanimously opted to maintain interest rates constant last month. This belief drove Treasury yields higher and fueled earlier dollar gains.
Fed funds futures showed expectations of a 25 basis point hike at the end of a two-day policy meeting on July 26 and rose to 88.7%, according to CME Group’s (NASDAQ: CME) FedWatch Tool.
The dollar index, which measures the U.S. currency against a basket of six others and settled at 103.3480 compared to the previous day’s close of 103.079 up by 0.26%
Bullion had a neutral trade. Gold Prices settled at 58473 compared to the previous day’s close of 58409. Silver prices settled at 71357 compared to the previous day’s close of 70542
Copper prices had a volatile trade and settled at 717.25, almost flat.
Crude oil continued to rise as concerns over a sluggish demand rebound in China outweighed the potential of tighter supply due to output curbs from Saudi Arabia and Russia as well as a larger-than-expected decline in U.S. crude stockpiles.
According to market sources quoting American Petroleum Institute data, U.S. crude stocks decreased by around 4.4 million barrels in the week ending June 30, but petrol and distillate inventories increased. According to a Reuters survey of analysts, the amount of petroleum stockpiles will decrease by around 1 million barrels.
Government data on U.S. inventories is due at 8.30 pm today.
Economic data and events to watch
China
At 7.15am – Caixin Services PMI. The forecast is 56.2 from 57.10.
Above data could have a negative impact on base metals.
Eurozone
At 11.30 am – German Factory Orders m/m. Data is forecast to come at 1.1% from a contraction of 0.4%
At 2:30 – Retail Sales m/m. Data is forecast to be 0.2% higher from 0.0%.
Above data could have a positive impact on the Euro.
U.K.
At 2.00 pm – Construction PMI. Data is foreseen at 50.9 lower than the previous 51.6.
Above data could have a negative impact on the pound.
Canada
At 6:00 pm – Trade Balance. Data is foreseen at 1.4B lower from the previous 1.9B.
Above data could have a negative impact on the dollar.
U.S.
At 5:45- ADP Non-Farm Employment Change. Data is foreseen at 226K compared to the previous 278k.
At 6:00 pm – Trade Balance. Data is foreseen at 1.4B lower from the previous 1.9B.
– Unemployment Claims. Data is foreseen at 247k higher than 239k previously.
– – Trade Balance. Data is forecast to have a contraction of 68.9B from a contraction of 74.6 B.
At 7.15 pm – Final Services PMI. Data is foreseen at 54.1, unchanged from the previous.
At 7.30 pm – ISM Services PMI. Data is foreseen at 51.3 higher from 50.3.
JOLTS Job Openings. Data is foreseen at 9.93M lower from the previous 10.10M.
At 8.30 pm – Crude Oil Inventories. Data is forecast to have a contraction of 2.0M from the previous 9.6M.
Above data and events will have a volatile impact on the dollar.
All day – OPEC meeting Second day
Chief executives from major global oil firms are set to meet with energy ministers from the OPEC states on Wednesday and Thursday, potentially offering more cues to oil markets.