U.S. dollar retreated from a six-month high, while the Japanese yen surged as comments from Bank of Japan Governor Kazuo Ueda signalled a potential change in monetary policy.
The Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.51% lower to 104.5230, falling from last week’s six-month high of 105.15. While, USDJPY retreated 1.2% at 146.06, as BOJ head Kazuo Ueda flagged a potential pivot away from negative interest rates.
U.S. consumer inflation data, due on Wednesday, as well as producer prices on Thursday, will be carefully studied for more cues on monetary policy and the path of interest rates.
Bullions and base metals had a positive trade yesterday following the weakness in the dollar. Crude oil prices gave up some gains as markets awaited forecasts on supply and demand from an OPEC report due later in the day, although optimism over recent supply cuts kept prices near 10-month highs.
MCX Gold futures settled at 58930 almost flat. Silver at 71942 up 0.53%. Copper prices settled at 733.40 up 1.70%. Crude oil settled at 7248 down 0.14. Natural gas settled at 217.00 up 0.51%.
Economic data and events scheduled today
India
At 5.00pm-
CPI YoY. Data is foreseen at 7.0% lower from previous 7.44%
Industrial production YoY. Data is foreseen at 4.8% higher form previous 3.7%.
Above data could have a positive impact on the Rupee
Eurozone
At 11.30am – German WPI m/m. Data is foreseen at -0.1% compared to previous -0.2%.
At 2.30pm – German ZEW Economic Sentiment. Data is foreseen at -15.0, previous was at -12.3
At 2.30pm – ZEW Economic Sentiment. Data is foreseen at -6.2 previous was at -5.5.
All above data could have a volatile impact on the Euro.
UK
At 11.30pm –
Claimant Count Change. Data is foreseen at 17.1k previous was at 29.0k.
Average Earnings Index 3m/y. Data is foreseen at 8.2% unchanged from 8.2%.
Unemployment Rate. Foreseen at 4.3% from previous 4.2%.
Above data could have a volatile impact on the Pound.
U.S.
At3.30 pm – NFIB Small Business Index. Data is foreseen at 91.6 from previous 91.90.
At 10.31pm – 10-y Bond Auction.
All above data could have a neutral impact on the dollar.