After hitting a two-month high yesterday, the dollar index struggled for direction. The currency sparked against its major counterparts after Federal Reserve meeting minutes left the door open for more rate hikes and data this week indicated a resilient U.S. economy.
The minutes of the Fed’s July policy meeting revealed disagreement among officials on the necessity of more rate increases last month, emphasising the risks to the economy if rates were raised too high.
Rising U.S. Treasury yields and a strong dollar put pressure on the yellow metals. Prices tumbled to a five-month low yesterday. While base metals found some ground and settled green.
Demand growth in China concerns continued adding pressure on oil prices. Crude oil spanned more than one-month winning streak as concerns about demand growth in China as its economy slows, and the possibility of higher for longer U.S. rates triggered losses.
Gold Future settled at 58290, down 0.67%. Silver futures settled at 70018, up 0.42%. Crude oil at 6685, up 0.59%. Copper gained 0.37% at 723.60.
Economic data released yesterday
The Labour Department reported on Thursday that initial claims for state unemployment benefits in the US fell 11,000 to a seasonally adjusted 239,000 for the week ended August 12, erasing half of the spike in the preceding week.
The Philadelphia manufacturers index was 12, compared with the negative 10 expected.
Japan Headline consumer price index (CPI) inflation rose 3.3% year-on-year (y-o-y), more than expectations for a reading of 2.5%. CPI inflation also grew 0.5% in July from the prior month, picking up pace after remaining languid over the past two months.
Economic data and events scheduled today
U.K.
At 11.30 am – Retail Sales m/m. Data is foreseen at -0.6% from the previous 0.7%.
Above data could have a negative impact on the pound.
Eurozone
At 2.30 pm-
Final Core CPI y/y. Data is foreseen at 5.5% unchanged from the previous 5.5%.
Final CPI y/y. Data is foreseen at 5.3% unchanged from the previous 5.3%.
Above data could have a neutral impact on the Euro.
Canada.
At 6.00 pm-
IPPI m/m. Data is foreseen at 0.2% from the previous -0.6%.
RMPI m/m. Data is foreseen at 2.1% from the previous -1.5%.
Above data could have a positive impact on the Canadian dollar.