Forex Today: Dollar oversold but still weak

FXStreet Team FXStreet

Here is what you need to know on Monday, August 31:

The dollar plunged on Friday in the aftermaths of the US Powell’s announcement last week. The Federal Reserve shifted the monetary policy, putting more emphasis on employment and saying it could let inflation run beyond the 2.0% target.

Japanese PM Shinzo Abe resigned over health issues. After eight years leading the country, Abe´s decision to step down spurred risk aversion by the end of the week. Still, he said that he would continue to lead the country until a new PM is approved.

The Pound could suffer a setback at the beginning of the week, amid news indicating that UK’s Finance Minister Sunak is considering a set of tax increases to compensate coronavirus pandemic extraordinary expenses. However, other cabinet members opposed to such a move, but instead want to consider spending cuts.

Wall Street closed with gains, despite risk-aversion dominated the first half of the day, following Abe’s resignation. US Treasury yields eased in the last trading day of the week but closed it with gains.

Gold closed with gains around $1,964 a troy ounce, after falling in the previous two weeks. Crude oil prices remained stable.

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Ethereum outperforms as crypto bulls dominate

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FXStreet Team

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Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

GBP/USD revisits 1.3530; Dollar pushes harder

GBP/USD adds to the weekly correction and recedes toward the 1.3530 zone on Friday. Indeed, Cable faces increasing selling pressure on the back of extra gains in the Greenback, particularly fuelled by Chair Warsh’s speech at the Jackson Hole Symposium and the US NFP Annual Revision (-79K).

EUR/USD breaches below 1.1600, multi-day lows

EUR/USD now accelerates its decline and retreats to seven-day troughs in the sub-1.1600 region at the end of the week. The pair’s pullback comes on the back of the strong rebound in the US Dollar after Chair Warsh delivered a hawkish message in Jackson Hole, while the US NFP Annual Revision came in at -79K.

Gold challenges its 200-day SMA near $4,530

Gold’s decline gathers fresh steam, hitting weekly lows while disputing its critical 200-day SMA near $4,530 per troy ounce. The yellow metal’s increasing weakness comes in response to the generalised upbeat tone in the US Dollar and the widespread rebound in US Treasury yields, as investors continue to reprice a Fed rate hike in September.

Crypto Today: Bitcoin, Ethereum, XRP rally loses steam despite steady ETF inflows

Bitcoin is back below $80,000 at the time of writing on Friday, after a second attempt at breaking resistance between $81,000 and $82,000. Meanwhile, Ethereum and Ripple mirror Bitcoin’s cooling trend, with ETH sliding to $2,500 and XRP falling toward $1.40 support.

Week ahead – RBNZ and BoC decide on rates ahead of all-important US NFP

Dollar rebounds ahead of ISM PMI and NFP data. RBNZ is expected to raise rates; focus to fall on forward guidance. BoC is set to remain on hold; will it raise rates in 2027?

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.