The continuation of the selling pressure remained unchanged around the Greenback in the context of further improvement in the appetite for the risk-associated universe, all ahead of the release of the FOMC Minutes and the speech by Chief Powell at Jackson Hole.
Here is what you need to know on Tuesday, August 20:
The USD Index (DXY) collapsed to multi-month lows near 101.80 on the back of the intense upbeat sentiment in the risk complex. On August 20, the Fed’s Bostic and Barr are due to speak, seconded by the API’s weekly report on US crude oil inventories.
EUR/USD advanced to new 2024 peaks near the 1.1100 mark in response to the steep decline in the Greenback. The final Inflation Rate in the euro area is expected on August 20, along with Germany’s Producer Prices.
GBP/USD maintained its recovery well in place and approached the key 1.3000 yardstick. Next on tap across the Channel will be Public Sector Net Borrowing figures due on August 21.
USD/JPY dropped to multi-day lows and revisited the low-145.00s following the sharp decline in the US Dollar and mixed yields. The Balance of Trade results will be the next data release noteworthy in Japan on August 21.
An auspicious start to the week saw AUD/USD climb to five-week highs around 0.6730. The RBA Minutes will be published on August 20.
Demand concerns stemming from China and increasing hopes surrounding ceasefire talks in the Middle East dragged prices of WTI to two-week lows near $73.50 per barrel.
Gold prices traded within a narrow range and stayed close to recent all-time highs around the $2,500 mark per ounce troy. Silver rose for the third straight day and surpassed the $29.00 level per ounce, or five-week tops.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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