ICM: Dollar Dips Ahead of Powell’s testimony

ICM, the leading London-based FX and CFDs provider, reported that the dollar fell for the second consecutive day as investors focus on the economic data and the Fed chairman’s testimony.

Major U.S. indices ended the session mixed yesterday as investors await new developments in the trade war between China and the US and the earnings of the second quarter. As per ICM trading platform, the Dow Jones rose slightly to close above 25000 for the second consecutive day. SPX500 and Nasdaq Composite fell by 0.1% and 0.3% respectively. Investor’s focus could shift to the release of earnings in the coming days in the absence of headlines regarding the trade spat. Goldman Sachs, Johnson and Johnson, and United Health will report their second-quarter earnings today.

ICM stated that the dollar index which measures the strength of the greenback against a basket of major currencies finished lower for the second consecutive day. DXY fell from a high of 95.25 on Friday and traded at a low of 94.41 yesterday. The retail sales figures for June were released yesterday, and the numbers came out as expected. The Fed Chairman, Jerome Powell, will deliver semi-annual monetary policy today to the Senate banking committee. The US 10-year treasury yields rose to a two-week high of 2.87 as investors anticipate that the Chairman will confirm the Hawkish path of the interest rates.

The British pound is in focus as the market awaits key economic data this week. Three major data releases are due this week such as the Job report, Consumer Price Index, and the retail sales. A better than expected economic data will allow the Bank of England to be more hawkish in its next meeting on August 2nd. However, the Sterling remains vulnerable to the headline regarding Brexit. As per ICM trading Platform, the GBPUSD rose a high of $1.3292 yesterday, but the gains were faded, and the pair ended the day almost flat.

The New Zealand dollar rose to a one-week high against the United States dollar post the release of the second quarter consumer price index. The numbers came out less than expected, but the CPI YoY rose to 1.5% from 1.1% prior which supported the NZD. As per ICM trading platform, NZDUSD traded at a high of $0.6840.

The Reserve Bank of Australia released its July meeting minutes were the bank confirmed that there is no strong case for a near-term move in interest rates. However, the next rate move is likely to be up if the economy improves. Moreover, the Bank addressed the down risks to global growth arising from trade tensions. As per ICM trading platform, AUD rose from a low of $0.7402 to a high of $0.7438 post the release of the minutes.

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Gold prices ended the day almost flat near the lows of 2018. Gold prices remain under pressure as the Federal Reserve is expected to continue with its hawkish interest rate path. As per ICM cTrader platform, the Gold ounce tested a low of $1238 yesterday and settled at $1241, the lowest daily close in a year. The silver ounce ended the day almost unchanged at $15.79, near a seven-month low.

Oil prices tumbled heavily yesterday with Brent and WTI losing almost 4%. As per ICM trading platform, the West Texas Intermediate fell from a high of $70.85 to settle at $67.87 whereas Brent fell from a high of $75.34 to settle lower at a three-month low of $71.79. The slide in prices continued today despite the strike of oil workers in Norway. Oil prices are under pressure due to the rise in global output and the expectations that the Trump administration might use the Strategic oil reserve to lower gasoline prices ahead of November elections.

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