All Eyes Turn to Inflation Data

Dollar declined on Monday, following weaker-than-expected U.S. data that mitigated expectations of a Federal Reserve interest rate hike this year.

The U.S. dollar index fell by 10 pips on Monday, and settled at 95.58.

Dollar fell vs. a basket of currencies undermined by recent soft U.S. retail sales data as the Empire State Manufacturing Index for August declined to negative 4.2 from positive 0.6.

USD settled at ¥101 as Japanese stocks declined yesterday. Japan's economy failed to grow on a quarterly basis during the April-June period, such information boosted speculation about the strength of the Japanese economy and the stimulus programmes launched by the Bank of Japan. 

USD could trade under pressure in anticipation of the Inflation data and minutes from July meetings of the Federal Reserve.

Gold failed to settle above $1,350 and traded at $1,340. The yellow metal could trade in a wide range in anticipation of important data from the U.S. 

The Pound continued to extend its losses, trading below $1.29 vs. USD, and could decline further to “Brexit” levels.

Oil prices touched five-week highs on Monday, surging by 10% cumulatively in the past 3 sessions. U.S. crude oil traded above $45.50 on OPEC hopes as producers may have an informal meeting in Algeria later on this month.

The most important economic events:

• GBP Consumer Price Index (YoY) (JUL): (GMT 10:30) – Important – Forecast (0.5%) – Previous (0.5%).
  GBP Core Consumer Price Index (YoY) (JUL): (GMT 10:30) – Important – Forecast (1.4%) – Previous (1.4%).
• EUR Euro-Zone ZEW Survey (Economic Sentiment) (AUG): (GMT 11:00) – Important - Forecast (N/A) – Previous (-14.7).
• USD Consumer Price Index (YoY) (JUL): (GMT 14:30) – Important – Forecast (0.9%) – Previous (1.0%).
  USD Consumer Price Index Ex Food & Energy (YoY) (JUL): (GMT 14:30) – Important – Forecast (2.3%) – Previous (2.3%).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.