The US dollar retreated from the day’s high against the euro and yen on Monday as market continued to digest last week’s mixed U.S. economic data and looked ahead to a key inflation reading for fresh clues on when the Federal Reserve is likely to begin cutting interest rates.
The US dollar initially rebounded on Friday after data showed employers hired 216,000 workers in December, beating economists’ expectations, while average hourly wages rose 0.4% in the month.
Crude oil prices fell more than 4% on the back of a sharp price cut by main exporter Saudi Arabia and an increase in OPEC production that offset supply from growing geopolitical tensions in the Middle East.
Increased supply and competition from rivals prompted Saudi Arabia on Sunday to cut the official February selling price for Asia-bound flagship Arab Light crude to a 27-month low. Saudi Arabia states that it aims to remain competitive in the market and does not want to unilaterally reduce its volume.
After hitting three-week lows, Bullion bounced back after the US dollar fell sharply against its major currencies. The yellow metal fell in the morning session as the dollar held on to last week’s gains and Treasury yields held high as hopes of an early Federal Reserve rate hike faded and markets awaited US inflation data this week.
Copper rebounded from monthly lows on the back of a weaker US dollar, uncertain demand and gains in sentimentally strong stocks.
MCX gold futures down 0.74% to 62095. Silver settled down by 0.22% at 72427. Copper fell 0.05% to 720.35. Crude oil 5863, down 4.32%. Natural gas gain 0.08% to 236.70.
Economic data and events scheduled today – Will the plethora of data affect the US Dollar?
Japan
At 5.00am-
Tokyo Core CPI y/y. Data is foreseen at 2.1% from previous 2.3%.
Household Spending y/y. Data is foreseen at -2.2% from previous -2.5%.
Above data could have a positive impact on Yen.
Australia
At 6.00am-
Retail Sales m/m. Data is foreseen at 1.2% from previous -0.2%.
Building Approvals m/m. Data is foreseen at -1.8% from previous 7.5%.
Above data could have a mixed impact on the dollar.
Eurozone
At 12.30pm- German Industrial Production m/m. Data is foreseen at 0.4% from previous -0.4%.
At 1.15pm- French Trade Balance. Data is foreseen at -7.9B from previous -8.6B.
At 2.30pm- Italian Monthly Unemployment Rate. Data is foreseen at 7.9% from previous 7.8%.
At 3.30pm- Unemployment Rate. Data is foreseen at 6.5% from previous 6.5%.
All above data could have a volatile impact on the Euro.
UK
At 5.31am- BRC Retail Sales Monitor y/y. Data is foreseen at 2.3% from previous 2.6%.
Above data could have a neutral impact on the Pound.
Canada
At 7.00pm-
Building Permits m/m. Data is foreseen at -1.2% from previous 2.3%.
Trade Balance. Data is foreseen at 2.0B from previous 3.0B.
All above data could have a negative impact on the Canadian dollar.
US
At 7.00pm- Trade Balance. Data is foreseen at -64.9B from previous -64.3B.
Tentative- RCM/TIPP Economic Optimism. Data is foreseen at 42.00 from previous 40.00.
At 10.30pm- FOMC Member Barr Speaks. Above data could have a volatile impact on the dollar
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