Dollar Rebounds, Stocks March Higher on Solid Data

Dollar

The dollar index, which measures the greenback against a basket of major currencies, rebounded from its recent lows to 93.55 following an upbeat jobs report. The report showed that the US economy created 1.763 million jobs in July, and the Unemployment rate fell to 10.2% from 11.1%. The solid data eased investors’ woes over the recovery of the US labor market and lowered the chances of further monetary stimulus. The EURUSD fell to $1.1759, the GBPUSD dropped to $1.3050, and the USDJPY rallied to 106.04.

Equities

Major US stock index futures kicked off the week on a stronger note on unemployment benefits extension and strong jobs data. Over the weekend, President Donald Trump signed several executive orders aiming at extending the relief package after the congressional leaders failed to make a deal over the new coronavirus stimulus bill. However, the unemployment benefits were lowered from $600 per week to $400. On the other hand, the solid July jobs report released on Friday added to the positive sentiment. Whereas the escalation in tensions between China and the United States, kept investors on alert. The US sanctioned Hong Kong leader, and Trump signed an order over the threat posed by Chinese applications WeChat and TikTok. Investors will closely monitor the US-Sino trade talks scheduled on the 15th of August. The Dow Jones Industrial Average futures rose to 27469, S&P500 futures rallied to 3353, and Nasdaq futures ascended to 11133.

Metals

Gold prices fell from their record high as the dollar gained strength following upbeat jobs data. The recent improving data eased investors’ bets over new stimulus measures from the Federal Reserve to boost the labor market recovery. The price of a gold ounce tumbled to $2015 from a record high of $2075 set on Thursday. Also, the price of a silver ounce dropped to $27.37 but managed to recover towards $28.40, and palladium futures declined to $2215.

Oil

Oil prices edged higher during the first trading hours of the week on optimism over oil demand recovery. Saudi's Aramco Chief stated that they started seeing a recovery in demand levels in Asia, as economies reopened. On the other hand, Iraq announced late last week to decrease output further by 400 thousand barrels per day in August and September to compensate for the breach of OPEC+ deal. The West Texas Intermediate crude September delivery rose to $41.88, and Brent blend October delivery advanced to $44.93.

Major Economic Events

Disclaimer

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