Forex Today: Dollar builds on last week's gains despite thin trading conditions
|Here is what you need to know on Monday, September 5:
The US Dollar Index preserved its bullish momentum after having gained %0.7 last week and touched its highest level in two decades above 110.00 early Monday. The cautious market mood helps the greenback continue to outperform its rivals as investors await Sentix Investor Confidence and Retail Sales data from the euro area while keeping an eye on headlines surrounding the energy crisis. The US market will be closed due to the Labor Day holiday and the trading action could remain subdued in the second half of the day.
Gazprom announced late Friday that it had halted gas flows to Europe after having detected an oil leakage. The gas supplier refrained from setting a timeframe for how long the maintenance would last. Siemens said that Nord Stream should have other operational turbines at the compressor station where the leak was detected and argued that there was no reason for the pipeline's operation to fully stop. Over the weekend, Gazprom said it would deliver 42.7 million cubic meters of natural gas through Ukraine but this development didn't allow the shared currency to find demand at the beginning of the week.
Meanwhile, the data from China showed that the Caixin Services PMI declined to 55 in August from 55.5 in July.
EUR/USD dropped below 0.9900 for the first time since October 2002 before recovering modestly in the early European morning. As of writing, the pair was down 0.5% on the day at 0.9902. Retail Sales in the euro area are forecast to decline by 0.7% in July.
GBP/USD edged lower amid broad-based dollar strength during the Asian trading hours and dropped below 1.1500. The pair stays on the back foot at around 1.1480. Later in the day, the UK Conservative Party will announce the result of the UK leadership contest at 1130 GMT.
USD/JPY is struggling to gather bullish momentum as the risk-averse market environment helps JPY find demand. The pair fluctuates in a relatively tight range above 140.00.
Gold staged a decisive rebound on Friday but ended up closing the week in negative territory. XAU/USD stays relatively quiet early Monday as US bond markets remain closed.
Bitcoin continues to move sideways below $20,000 and Ethereum holds steady at around $1,500.
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