ICM, the leading London-based FX and CFDs provider, reported that the greenback was under pressure as Trump criticized the Federal Reserve interest rate path whereas Wall Street closed broadly higher for the third straight session on optimism from the awaited US/China trade talks.
US equities ended higher for the past three days on hopes that the trade dispute between the United States and China will be solved. The Dow Jones Industrial Average climbed 0.4% to settle at 25758, the SPX500 rose by 0.2% to 2857, and the Tech-Heavy Nasdaq Composite was slightly higher. Stocks lost some of the gains ahead of the closing bell as President Trump criticized the Fed Chairman Jerome Powell and higher interest rate. Moreover, despite the anticipated talks between China and the United States, Trump administration will impose 25% tariffs on $16 billion of Chinese imports. China said that it would retaliate against any measures.
ICM highlighted that the dollar index which measures the greenback against a basket of major currencies tumbled following Trump’s comments on interest rates. It is not the first time that the president criticizes the Federal Reserve. Earlier in July, the dollar fell against peers as Trump addressed the risks of higher US dollar to the US economy. He also said that China and the European Union are manipulating the markets and depreciating their currencies. Moreover, the dollar slipped earlier as investors pulled out from the safe haven ahead of anticipated trade talks. As per ICM trading platform, DXY traded at a low of 95.44, the USDJPY fell to a two-month low of 109.77, and the EURUSD rose to a high of 1.1544 to recover from the latest selling round.
Gold prices rose to a one-week high during the Asian session as the dollar weakened. As per ICM trading platform, the gold ounce traded at a high of $1196. The precious metal lost its shine as the Fed raised interest rates taking US treasury yields higher. Gold could be a winner if Trump’s comments affect the monetary policy stance of the Federal Reserve. On the other hand, the silver ounce rose to a high of $14.82.
Oil prices rallied higher for the third consecutive day. As per ICM trading platform, the West Texas Intermediate crude futures settled at $66.43 per barrel and the Brent futures closed at $72.17 per barrel. The American Petroleum Institute (API) will report the weekly US crude oil stock. The inventory data from the United States had a significant effect on the oil prices in the past two weeks.