Dollar Dips Along with Yields; Gold Reclaims $2000

Dollar

The dollar index, which measures the greenback against a basket of major currencies, added to previous losses, falling to 92.51, its lowest level since May 2018. The softer-than-expected economic data weighed on the bets of a fast and healthy recovery and drove yields back lower where US 10-year yields fell to 0.661%, after having a sharp upside rally on optimism last week. Market participants are looking forward to a series of economic releases, and the minutes of the last monetary policy meeting. The EURUSD rallied to a two-week high of $1.1905, slightly short from recording the highest level since May 2018, and the GBPUSD edged higher to $1.3170.

AUD

The Australian dollar held its ground following the RBA monetary policy minutes. The minutes of the last meeting revealed that the bank is expecting the recovery to be a bit slower than previously expected due to the virus outbreak in Victoria. Also, the board concluded that there is no need to change policy, but will adjust settings if needed to ensure economic progress. The AUDUSD advanced to $0.7235, and the AUDNZD extended its upside rally to 1.1043, the highest since August 2018.

Equities

Major US stock index futures were a bit mixed during the early trading of the week. Investors are looking forward to fresh hints on the economic recovery, while closely monitoring the US-China tensions, and preparing to the coming US presidential elections. The Dow Jones Industrial Average futures continued to trade in a tight zone falling to 27655, the S&P500 futures hovered near the interim high of 3387, points away from recording an all-time high, and Nasdaq futures scored a new record high of 11299.

Metals

Precious metals prices regained strength as the dollar dipped along with US treasury yields. The price of a gold ounce rose again above the $2000 level, trading at $2010, the price of a silver ounce surged to $28.33, and palladium futures recovered to $2231.

Oil

Oil prices edged higher as top producers delivered their promises in July. OPEC officials declared that the compliance with OPEC+ cuts in July was at 97%, meaning that producers were cutting at a record to ensure market stability. The West Texas Intermediate crude September delivery rose to $42.93, and Brent blend October delivery rallied to $45.45. Market participants are looking forward to the US inventory reports by the American Petroleum Institute today, and the US Energy Information Administration tomorrow.

Major Economic Events

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