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

Eren Sengezer FXStreet

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

FXStreet

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.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.