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Forex Today: Dollar stays resilient to start the week amid cautious mood

Here is what you need to know on Monday, August 15:

After having closed the previous week on a firm footing, the greenback stays resilient against its major rivals early Monday with the US Dollar Index extending its recovery toward 106.00. There won't be any high-impact data releases featured in the European economic docket on Monday but Germany's Bundesbank will release its monthly report. In the second half of the day, the Federal Reserve Bank of New York's Empire State Manufacturing Survey and NAHB Housing Market Index data from the US will be looked upon for fresh impetus. 

Over the weekend, the Wall Street Journal reported that Chinese officials were planning for President Xi Jinping to meet his American counterpart Joe Biden in November. On the other hand, a delegation of American lawmakers arrived in Taiwan on Sunday, not allowing the US-China tensions to de-escalate. Reflecting the cautious market mood, US stock index futures are down between 0.2% and 0.3%. In the meantime, the benchmark 10-year US Treasury bond yield continues to move sideways above 2.8%. 

In the early Asian session, the data from China showed that Retail Sales rose by 2.7% on a yearly basis, missing the market expectation of 5% by a wide margin. Other data revealed that Industrial Production increased by 3.8% in the same period, compared to analysts' estimate of 4.6%.

Pressured by the disappointing data from China and the souring market mood, AUD/USD and NZD/USD were both down more than 0.5% at the time of press.

EUR/USD trades in negative territory below 1.0250 in the early European morning on Monday as the shared currency struggles to find demand in the risk-averse market environment. A recently conducted survey by Bloomberg showed that economists think that a eurozone recession is now more likely than not. 

GBP/USD continues to edge lower toward 1.2100 early Monday after having lost nearly 100 pips on Friday. Reuters reported on Monday that 30 of 51 polled economists expect the Bank of England to hike its policy rate by 50 basis points to 2.25% at the September policy meeting.

USD/JPY continues to fluctuate in a relatively tight range above 133.00 on Monday. Earlier in the day, the data from Japan revealed that the real Gross Domestic Product expanded by 0.5% on a quarterly basis in the second quarter. This reading came in slightly lower than the market expectation of 0.6% but failed to trigger a significant market reaction.

Gold stays on the back foot since having failed to clear $1,800. As of writing, XAU/USD was down 0.6% on the day at $1,792.

Following the weekend's choppy action, Bitcoin gained traction and climbed above $24,500. Ethereum gained nearly 14% last week and trades within a touching distance of $2,000 early Monday.

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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