July 27, 2018
The dollar index which measures the strength of the greenback against a basket of major currencies bounced-off a two-week low of 94.08 to settle near the highs at 94.78. DXY held the gains during the Asian session as market participants await the release of the second quarter GDP. President Donald Trump was bragging about a good GDP reading for the past two weeks. The preliminary reading of the second quarter GDP is expected to surpass 4%. USDJPY ended a six-day losing streak and rebounded from a two-week low to end the day at a high of 111.25.
The Euro fell to a one-week low against the United States dollar post the press conference of the European Central Bank President, Mario Draghi. The bank kept interest rates and the quantitative easing program on hold. Draghi said that there is no need to modify the forward guidance, overall risks to growth remain well balanced, and he expects a broad-based wage growth in second half of the year. Also, he confirmed that the exchange rate is not a policy target. EURUSD traded at a high of $1.1743 and turned lower to settle at $1.1638.
Gold prices retreated from a three-day high of $1235 as the US dollar strengthened. The bullion erased the gains earned on Wednesday and finished the day at $1222, the lowest close in a week. Silver prices had the same scenario where the silver ounce wiped out the gains of two consecutive days and settled lower at $15.38.
Oil prices ended higher for the third consecutive day supported by the drop in US inventories and the suspension of Saudi oil shipments through Bab-El-Mandeb. Saudi ships more than four million barrels per day through this lane which was attacked by the Houthi forces. The West Texas Intermediate settled at a high of $69.52, and the Brent ended the day at $74.31, its highest close in ten days. The energy services firm Baker Hughes will report the U.S. oil rig count today.
July 27, 2018