The dollar index (DXY00) Monday fell by -0.09%. The dollar Monday gave up an early advance and posted modest losses after hawkish comments from ECB Governing Council member and Bundesbank President Nagel pushed the euro higher. Lower T-note yields Monday also weighed on the dollar.
The dollar Monday initially moved higher after the stronger-than-expected U.S. July Empire manufacturing survey. The Chinese yuan was undercut by weaker-than-expected Chinese Q2 GDP and June retail sales reports.
The U.S. July Empire manufacturing survey of general business conditions index fell -5.5 to 1.1, stronger than expectations of -3.5.
EUR/USD (^EURUSD) Monday rose by +0.15% and posted a 16-1/2 month high. The euro recovered from early losses Monday and moved higher on hawkish comments from ECB Governing Council member and Bundesbank President Nagel, who said, "I expect the ECB will raise interest rates later this month by 25 bp" as core inflation in the Eurozone is "very sticky” but "for the September meeting, we will see what the data will tell us."
EUR/USD Monday initially moved lower after the Bundesbank warned that the economic recovery in Germany this year may be weaker than earlier expected. In its monthly report, Germany's Bundesbank said, "The economic recovery in the future course of the year could be somewhat more hesitant than expected in the June forecast, and core prices will probably stay "very high over the summer."
USD/JPY (^USDJPY) on Monday fell by -0.07%. The yen on Monday recovered from early losses and moved slightly higher as weakness in T-note yields sparked short covering in the yen. The yen on Monday initially moved lower on speculation the BOJ may refrain from ending its stimulus measures or changing its yield-curve control policy at its meeting late this month after BOJ Governor Ueda said not much has changed on bond market functionality from the BOJ’s last policy meeting in June. Trading in the yen was subdued Monday, with markets closed in Japan for the Marine Day holiday.
August gold (GCQ3) Monday closed down -8.0 (-0.41%), and Sep silver (SIU23) closed down -0.176 (-0.70%). Precious metals prices on Monday closed moderately lower. Strength in stocks on Monday curbed the safe-haven demand for precious metals. Silver prices were also under pressure on concerns that Chinese demand for industrial metals will weaken after China's Q2 GDP grew less than expected. Lower global bond yields Monday limited losses in precious metals.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
