With political uncertainties in the US in the background and tensions between North- Korea and the US increasing, the dollar managed to recover from yesterday’s losses as US job vacancies reached a record-high in June and drove the currency to a 1½ week- high. Meanwhile, in the commodity markets, oil could not sustain its gains arising from Saudi Arabia’s willingness to cut its oil supplies by more than it pledged, as global oil production does not show any signs of retreating from high levels.
The dollar bounced by 0.36% to 93.68 against a basket of major currencies after the JOLTS Job openings surprised forecasts in the European session. Job vacancies increased by 6.163 million in June instead of 5.775 million expected, exceeding the previous mark of 5.702 million and recording a multi-year high. The greenback surged above the previous week’s top of 93.61 when non-farm payrolls came in better than expected. However, questions on whether the Fed will tighten its stimulus monetary program in September persist as the St. Louis and Minneapolis Fed presidents sounded yesterday more certain about rates remaining steady. Specifically, Bullard and Kashkari supported that any further improvements in labor conditions are unlikely to boost inflation toward the target. Yet, they expressed their satisfaction with the current monetary policy given the current macroeconomic picture. Now, markets anticipate the PPI and CPI figures, pending to be published on Thursday and Friday respectively, to throw some light on the direction of inflation.
The euro lost ground in the wake of the stronger JOLTS figures, falling by 0.51% to 1.1749 from $1.1809 prior the data release.
Euro/pound which previously during the European trading had touched a fresh ten-month high of 0.907, sank by 0.26% to 0.9055, despite the pound posting losses for the fourth consecutive day.
The kiwi fell to a fresh three-week low of $0.7332 during the European trading ahead of the RBNZ policy meeting on Thursday, where analysts project policymakers will keep rates flat.
The aussie also plummeted versus the greenback, falling to 0.7902 giving up its gains made earlier when data out of the country showed improvements in Australian business confidence.
Regarding energy markets, oil prices reversed gains made earlier in the day when Saudi Arabia announced its decision to cut supplies by up to 10% towards Asian countries in September to comply with the production cuts deal. Despite the largest crude oil exporter, Saudi Arabia, expressing its willingness to reduce production by 520,000 bdp worldwide in September, more than its pledge of 486,000 bpd, oil could not sustain its gains as overall production remains high. WTI crude and Brent declined to $49.04 and $52.01 per barrel respectively.
Gold price dropped by 0.31% to $1253.51 per ounce, reaching a 1½ week low as the dollar bounced back.
