Here is what you need to know on Monday, August 22:
The greenback preserves its strength to start the week after having registered impressive gains against its rivals last week. The US Dollar Index rose 2.3% to post its biggest one-week gain last week and was last seen trading modestly higher on the day at around 108.20. The Federal Reserve Bank of Chicago's National Activity Index for July will be featured in the US economic docket and Statistics Canada will release the New Housing Price Index data. In the absence of high-impact data releases, investors will also keep a close eye on risk perception. In the early European session, US stock index futures were down between 0.45% and 0.65%.
Although markets are yet to make up their mind about the size of the September Fed rate hike, Reuters reported that only 18 of 94 economists surveyed in a recent poll expected the US central bank to opt for a 75 basis points (bps) rate hike. Nevertheless, the CME Group FedWatch Tool shows that markets are pricing in a 48.5% probability of a 75 bps rate increase next month.
During the Asian trading hours, the People's Bank of China announced that it lowered the one-year loan prime rate (LPR) and the five-year LPR by 5 basis points and 13 points, respectively to 3.65% and 4.3%. This dovish step taken by the Chinese central bank helped the AUD and NZD stay resilient against the USD at the beginning of the week. As of writing, the NZD/USD pair was up 0.53% on the day at 0.6200 and the AUD/USD pair was up 0.42% at 0.6900.
EUR/USD is struggling to stage a recovery following last week's sharp decline and trading below 1.0050. According to several news outlets, Russia plans to shut down the Nord Stream gas pipeline for three days for maintenance at the end of the month.
GBP/USD lost nearly 300 pips last week and continues to trade on the back foot within a touching distance of 1.1800.
USD/JPY consolidates last week's gains and trades in a relatively tight channel at around 137.00 early Monday.
Gold registered losses for five straight days and stays under modest bearish pressure in the European morning on Monday. At the time of press, XAU/USD was trading in negative territory slightly above $1,740.
After having suffered heavy losses last Friday, Bitcoin recovered modestly over the weekend but struggled to gather bullish momentum. BTC/USD trades in negative territory below $21,500 on Monday. Ethereum is down more than 2% on the day, continuing to push lower toward $1,500.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops to near 1.0950 ahead of EU/ US inflation data
EUR/USD is dropping to near the 1.0950 region, under fresh selling pressure amid an uptick in the US Dollar on Thursday. Softer-than-expected French, German and Spanish inflation data weigh on the Euro. All eyes are on the Eurozone and US inflation data for fresh impetus.
GBP/USD hovers around 1.2700, US PCE data looms
GBP/USD is fluctuating around 1.2700 in European trading hours on Thursday. The US Dollar recovery is maintaining the downward pressure on the pair, as markets trade with caution ahead of the US PCE inflation data, BoE- and Fed-speak.
Gold price remains supported by dovish Fed expectations; eyes US PCE for fresh impetus
Gold price (XAU/USD) extends its sideways price move heading into the European session on Thursday and remains confined in a narrow trading band below its highest level since May 5 touched the previous day.
Bitcoin Spot ETF anticipation fuels BTC price rally in spot and futures markets
Bitcoin Spot ETFs could see a batch approval in January. Eric Balchunas, a Bloomberg ETF analyst shared details of an updated application by asset manager BlackRock.
Inflation misses embolden dovish bets
A wave of inflation misses around the globe has helped to embolden doves, with the market continuing to price in peak rates and a move from central banks towards more investor friendly monetary policy into 2024.