ICM, the leading London-based FX and CFDs provider, reported that the greenback was mostly steady against peers as the market participants await several economic data this week.
The dollar index which measures the strength of the greenback against a basket of major currencies ended slightly down on Friday, despite the good preliminary reading of the second quarter GDP. DXY wasn’t able to post any weekly close higher than 94.55, as the index is finding heavy resistance near the 94.60-95.60 area. The economic calendar is holding several events that are crucial for the US dollar such as the FOMC meeting, the ADP employment change, and the job report on Friday. The chances of a rate hike by the Federal Reserve in this week’s meeting are very low as the Fed is widely expected to raise rates in September. The firm economic figures from the United States provide full support to the monetary policy stance of the Federal Reserve. President Trump is expecting a greater economic growth supported by trade deals. However, the strength of the US dollar will be vulnerable to the normalization of the monetary policy by other central banks such as the European Central Bank and the Bank of England. The dollar rallied since April due to the divergence in the monetary policy between the Fed and other rivals.
On the other hand, the Bank of Japan will conclude its two-day meeting early on Tuesday where the bank is widely expected to leave monetary policy unchanged. As long as inflation numbers are not close enough to the BoJ price target, the bank is expected to hold steady its monetary policy. However, the surge in oil prices could help in boosting inflation. As per ICM trading platform, USDJPY is trading at 111.10. The pair was caught in a tight range of 100 pips last week.
Gold prices finished lower for the third consecutive week as the strong economic data from the United States suggest that the Federal Reserve will raise interest rates two more times this year. As per ICM trading platform, the gold ounce is trading at 1220. Last week, the bullion found heavy resistance near the 200-week simple moving average at $1235 and found support near the 2018 low at $1217. On the other hand, the silver ounce ended lower for the seventh consecutive week. As per ICM trading platform, the silver ounce is trading $15.43.
Oil prices ended slightly lower on Friday despite after rising for three consecutive days. Oil prices found support from the news that Saudi Arabia will stop shipping oil through Bab-El- Mandeb. As per ICM trading station, the West Texas Intermediate is almost flat on the day at $69 per barrel whereas the Brent is slightly up and trading at $74.40 per barrel.