Forex Today: Dollar oversold but still weak
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.
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