Dollar edges lower as markets await key US data
The Dollar has given back some of yesterday’s gains as markets focus on today’s revised US Q2 GDP and weekly jobless claims numbers, while tomorrow sees the release of the PCE inflation indicator. Traders are looking for clues to the US economy and inflation outlook, which will drive the Fed’s monetary policy actions. Markets are pricing in a 25bps rate cut next month but there are growing bets on a 50bps cut. The DXY index is sitting just below the 101.00 mark with the Dollar trading at 1.1132 against the Euro, at 1.3214 against the Pound, and at 144.83 against the Yen. EM currencies softened slightly yesterday as traders turned cautious ahead of the US data, and risk appetite dropped due to fears of trade war between the West and China. The Rand closed at the upper end of its recent trading range and is currently flat at 17.81. We expect a fairly quiet day today in the run-up to this afternoon’s data releases with the local currency tracking the Dollar’s moves against the majors. Local PPI data is due out this morning but is unlikely to impact significantly the Rand.
Gold rebounding
Gold, platinum, and palladium prices all weakened yesterday on some profit-taking, and as the Dollar recovered, gold went down 0.8%, palladium went down 2.7%, and platinum was 3.3% weaker. Gold has regained some ground this morning and currently sits at $2,517. The stronger Dollar also saw base metals close weaker across the board yesterday while Brent crude ended 1.5% lower at $78.65.
