The dollar reacted volatile after U.S. consumer prices were released which increased modestly last month, while initial jobless claims gained in the latest week. That was to highlight expectations the Federal Reserve will pause interest rate hikes at the next policy meeting.
Bullion prices had a volatile trade following the movement in the dollar. Prices witnessed a steep fall as worsening market sentiment and the prospect of more Federal Reserve rate hikes pushed investors into the dollar.
Copper prices remained under pressure as weak economic readings from top importer China, which showed that a post-COVID rebound worsened in July after a weak second quarter.
While both imports and exports in China decreased far more than forecasted in July, consumer prices in the country entered a state of deflation. Last month, the nation’s imports of copper decreased as well.
Crude oil retreated from 2023 highs following Chinese consumer data which slipped into deflation. Concerns about gasoline consumption in the world’s largest oil-buying nation were raised when factory gate prices continued to decrease in July in the No. 2 economy.
In its August outlook, OPEC, or the Organisation of the Petroleum Exporting Countries, predicted a strong demand outlook through 2024 and extremely limited immediate supply as a result of Saudi Arabia’s production restrictions.
MCX Gold futures settled at 58853, down 0.20%. After swinging in between gains and losses, Silver prices settled at 69981 almost flat. Copper futures settled at 728.70, down by 0.48%. Crude oil prices retreated by 0.81% and settled at 6873.00. Natural gas paused its recent rally and gave up 6% yesterday, settled at 228.60.
Economic data released yesterday
The Labour Department said on Thursday that the U.S. consumer price index (CPI) increased 0.2% last month, matching the increase from June. The CPI climbed 3.2% in the 12 months through July, up from a 3.0% rise in June, which was the smallest year-on-year gain since March 2021.
U.S initial claims for state unemployment benefits increased 21,000 to a seasonally adjusted 248,000 for the week ended Aug. 5. 230,000 claims were anticipated by economists for the most recent week.
Economic data and events to watch today
U.K.
At 11.30 am-
GDP m/m. The forecast is 0.20% previous was at -0.10%.
Prelim GDP q/q. The forecast is 0.0% and the previous was at 0.1%.
Construction Output m/m. The forecast is 0.0% previous was at -0.20%.
Goods Trade Balance. The forecast is -16.6B previous was at -18.7B.
Industrial Production m/m. The forecast is 0.2% previous was at -0.60%.
Manufacturing Production m/m. The forecast is 0.20% previous was at -0.20%.
Prelim Business Investment q/q. The forecast is -1.0%, from 3.3%.
All the above data could have a volatile impact on the pound.
Eurozone
At 12.15 pm- French Final CPI m/m. The forecast is 0.0% previous was at 0.0%.
At 1.30 pm – Italian Trade Balance. The forecast is 4.23B previous was at 4.71B.
Above data could have a negative impact on the Euro.
U.S
At 6.00 pm- Core PPI m/m. The forecast is 0.2% previous was at 0.1%.
At 6.00 pm – PPI m/m. The forecast is 0.2% previous was at 0.1%.
At 7.30pm – Prelim UoM Consumer Sentiment. Data is foreseen at 71.4 previous was at 71.6.
Above data could have a volatile impact on the dollar.