Dollar Ticks Lower as Yields Drop ahead of Fed

USD

The dollar index, which measures the greenback against a basket of major currencies, drifted lower to 97.40 during the Asian session. The Federal Reserve kicks off a two-day monetary policy meeting later today. The greenback plunged since late May amid growing chances that the Fed will be forced to cut interest rates to support the economy. The economic indicator signaled that the US economy could be slowing down. Moreover, the escalating trade tensions between China and the United States weighed on economic expectations. The US 10-year yields dropped to 2.073%, the USDJPY moved lower to 108.25, while the EURUSD rose to $1.1240.

AUD

The Australian dollar weakened against rivals following the Reserve Bank of Australia meeting minutes. The minutes confirmed the dovish stance of the bank. The board members believe that further easing would be appropriate and would stimulate the economy overall. Also, the bank reaffirmed that the Chinese-US trade disputes are raising the downside risks to the global economic outlook. The AUDUSD tumbled to $0.6833, the lowest since early January, and the EURAUD climbed to 1.6434.

Metals

Gold resumed the move higher supported by a weaker dollar and falling Treasury yields ahead of an anticipated Federal Open Market Committee meeting. The price of a gold ounce surged to a high of $1348. Meanwhile, the price of a silver ounce hovered near $14.90, and palladium soared to $1485, the highest since late March.

Oil

Oil prices drifted lower on soft economic news. The US Empire Fed Manufacturing Index dropped to -8.6, the lowest since October 2016. A series of indicators, which provide hints on the performance of the manufacturing activity, were softer lately signaling a weaker demand for oil. The West Texas Intermediate crude futures dropped to $51.61, and Brent futures declined to $60.50.

Major Economic Events

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.COM. 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.