All eyes on the Dollar. In what has been a light news week so far, attentions have gravitated back to the greenback and the implications of a potential September rate cut. Later today, markets will receive their latest clue as to the Fed’s intentions in the form of the FOMC minutes for the July meeting. Later on in the week, Jerome Powell is set to deliver a speech at the Jackson Hole Symposium, and although the event is detached from the day-to-day remit of the Federal Reserve, traders would do well to keep an eye on it.
Judging by the performance of the Dollar since last Friday, markets appear to be pricing in a rate cut for the next meeting in September. The Dollar Currency Index has been hammered over the last three sessions, from 103 on Friday’s open, all the way down to 101.4 by yesterday’s close. One of the beneficiaries of the faltering Dollar was the Pound Sterling, which closed at $1.303 on Tuesday, its highest for over a year. The same can be said for the Euro, which reclaimed $1.113 after yesterday’s session.
Gold added yet another record daily close to its tally yesterday, this time touting $2,514 an ounce. Oil prices can’t seem to pick a lane recently, at the whims of whatever the prevailing narrative in the Middle East seems to be. Brent Crude is nearing yearly lows at $76 a barrel; the spread with its American counterpart has been closing recently, with WTI now at $74.
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