USD Settles and Markets Await the FOMC Meeting

USD

The U.S. dollar settled yesterday vs. a basket of major currencies as treasury yields fell and with markets awaiting the two-day Federal Open Market Committee (FOMC) meeting.

• The U.S. dollar index settled above 97 pips, as investors mainly digested former FBI Director James Comey’s testimony

Traders are now focusing on the upcoming two-day Federal Open Market Committee (FOMC) meeting, as it is widely expected to bring a 25 basis point hike. Meanwhile, the recent soft run of the US inflation data has caused doubts among investors. 

Gold

Gold prices traded in sideways and settled at $1,264, in anticipation of the U.S. Producer Price Index, which will be released today.

GBP

The British pound was traded under pressure with the new week start settling at  $1.2650 vs. USD. The recent political instability in Britain is likely to affect the UK's economy, as the Conservatives will now have to govern without a majority in Parliament. Technically, GBP could trade under pressure and decline further to $1.25, while it could hit new highs and touch $1.28.

Oil

Oil prices recovered slightly yesterday on signs of inventory declines in the United States and news that Saudi Arabia could reduce volumes of crude to some Asian markets in July. U.S. crude managed to settle above $46, in anticipation of the U.S. inventories data, which will be released tomorrow.

The most important economic events:

• GBP Consumer Price Index (YoY) (MAY): (GMT 08:30) – Important – Forecast (2.7%) – Previous (2.7%).
• GBP Core Consumer Price Index (YoY) (MAY): (GMT 08:30): Important – Forecast (2.4%) – Previous (2.4%).
• EUR German ZEW Survey (Economic Sentiment) (JUN): (GMT 09:00): Important – Forecast (21.8) – Previous (20.6).

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.