GKFX
RISK WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. See our full Risk Disclosure and Terms of Business for further details.

Search LOGIN

Gold hits near one-month high on dollar weakness

 

 

“It’s hard to beat a person who never gives up.” — Babe Ruth

 

 

HEADLINES

 

  • Dollar falls against yen as investors reassess U.S. rate hike outlook
  • Gold hits near one-month high on dollar weakness
  • Oil sinks after weak factory data sparks demand concerns
  • Wall Street recedes after biggest month since 2020
  • S&P 500 falls to start August following its best month since 2020
  • USD/JPY: out of the woods? – Rabobank
  • GBPJPY Near Term: Upside favored

 

Dollar falls against yen as investors reassess U.S. rate hike outlook

 

The U.S. dollar was at its lowest level since mid-June against the Japanese yen on Monday as investors weighed the likelihood that the Federal Reserve will not raise interest rates as aggressively as some had expected.

The dollar index is up about 10% for the year so far following investor expectations of aggressive Fed rate hikes.

The dollar sank to its lowest level versus the yen since mid-June , and was down from a late 1998 peak of nearly 140 yen which it hit last month. The dollar was last down 1.1% at 131.74.

The dollar index was last at 105.26, down 0.7%.

 

 

COMMODITIES

 

Gold hits near one-month high on dollar weakness

 

Gold neared a one-month high on Monday on the back of a decline in the U.S. dollar, with investors awaiting economic data that could influence the path of Federal Reserve policy tightening.

Spot gold was up 0.3% at $1,771.19 per ounce by 1419 GMT, having earlier hit its highest since July 5 at $1,774.95.

U.S. gold futures rose 0.3% to $1,786.90.

Gold has more room to the upside given “major issues with Russia, Ukraine and China” and as the dollar runs into some resistance, said Daniel Pavilonis, senior market strategist at RJO Futures.

 

 

ENERGY

 

Oil sinks after weak factory data sparks demand concerns

 

Oil prices dropped sharply on Monday as weak manufacturing data in several countries weighed on the demand outlook while investors braced for this week's meeting of OPEC and its producer allies on supply.

Brent crude futures fell $4.10, or 3.9%, to $99.87 a barrel by 1:19 p.m. EDT (1719 GMT), having fallen to a session low of $99.09 a barrel.

U.S. West Texas Intermediate crude fell $4.93, or 5%, to $93.69 a barrel, after hitting a low of $92.42.

 

 

STOCKS

 

Wall Street recedes after biggest month since 2020

 

Wall Street fell on Monday, with declines in energy companies weighing against gains in Boeing (BA.N) as investors digested the U.S. stock market's biggest monthly gains in two years.

Stocks gave up some of a strong rally from last week that was driven by bets the Federal Reserve may not be as aggressive with interest rate hikes as some had feared.

Also helped by stronger-than-expected second-quarter results, the S&P 500 and the Nasdaq in July posted their biggest monthly percentage gains since 2020.

Some investors on Monday became more cautious in the wake of that recent rally.

 

S&P 500 falls to start August following its best month since 2020

 

The S&P 500 was lower on Monday as trading opened in August, with some investors questioning whether the recent rally has further to run following the best month since 2020.

The equity benchmark slipped 0.37% after the benchmark bounced between gains and losses. The Nasdaq Composite fell 0.22%. The Dow Jones Industrial Average dipped 53 points, or 0.16%, with a gain in Boeing helping contain the loss after the U.S. approved a plan to resume 787 deliveries.

The energy sector was a big drag on the market as oil prices fell. Shares of Diamondback Energy,  ExxonMobil,  Chevron and Devon Energy all traded down.

 

 

ANALYSIS

 

USD/JPY: out of the woods? – Rabobank 

 

“The BoJ is clearly the outliner amongst its G10 peers. While all the others are gripped by a determination to dampen the inflation rate, the BoJ is attempting to nurture it.  Having struggled with disinflationary and deflationary pressures for decades, Governor Kuroda sees an opportunity to finally create a virtuous cycle between wage inflation, demand and corporate profitability.  Speculators have been disappointed that the BoJ has stuck to its hugely accommodative policy during the past few months. “

“However, green shoots are appearing in relation to wage inflation that suggest that the BoJ could alter its YCC policy in the foreseeable future on its own terms.  The move lower in US bond yields from their June highs and the resultant fall in the spread vs. JGB yields has reduced pressure on the JPY and, for now, vindicated the decision of Kuroda not to pander to speculators.  USD/JPY is likely to remain sensitive to moves in US yields.  For now it seems that USD/JPY may favour a 130 to 135 trading range.”

 

 

CHART

 

GBPJPY Near Term: Upside favored

 

Technical View: Long position above 161.03. Target 162.92. Conversely, break below 161.03, to open 160.37.

Comments: The pair is expected to resume advance after correction.

 

 

Source: Trading Central 

 

 

 

CALENDAR

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

 

 

SOURCES

 

https://www.reuters.com/markets/us/dollar-wallows-near-3-week-low-bets-less-aggressive-fed-2022-08-01/
https://www.reuters.com/article/global-precious/precious-gold-hits-near-one-month-high-on-dollar-weakness-idUSL4N2ZD2WU
https://www.reuters.com/business/energy/oil-prices-slip-ahead-opec-meeting-2022-08-01/
https://www.reuters.com/markets/europe/futures-edge-lower-ahead-july-factory-activity-data-2022-08-01/
https://www.cnbc.com/2022/07/31/stock-futures-fall-slightly-to-start-august-trading-with-market-coming-off-best-month-since-2020.html
https://www.fxstreet.com/news/usd-jpy-out-of-the-woods-rabobank-202208011358