Ella 
Monday Highlights: Dollar Strengthens, Eurozone and US Data Awaited
The trading week commenced with the US dollar showing resilience against major currency pairs. Early European trading witnessed a marginal rise in the US dollar index, touching 102.50 following a dip triggered by the US July employment report. Market participants keenly await the Eurozone’s release of the Sentix investor confidence index for August. Conversely, the US is set to unveil its June consumer credit data.
The latest report from the US Labor Bureau indicated an increase of 187,000 in non-agricultural employment for July, slightly below market expectations of 200,000. This modest deviation prompted a mild selling pressure on the dollar. However, hawkish statements from Federal Reserve officials bolstered the dollar’s recovery. Federal Reserve Governor Michelle Bowman emphasized the potential for policy rate hikes if inflation progress falters. Concurrently, the President of the Atlanta Federal Reserve advocated for a sustained restrictive monetary policy until 2024. As reflected by the CME Group’s FedWatch tool, markets are currently pricing in a 30 percent likelihood of a 25 basis point rate hike by year-end.
EUR/USD closed the previous week with minimal change after a recovery on Friday. Despite the rebound, the pair remained below the 1.1000 threshold during Monday’s early trading.
GBP/USD displayed a downward trend in the past week, descending toward the 1.2700 level.
Having undergone a 150-pip decline in two days, USD/JPY experienced a resurgence on Monday, climbing above 142.00. A synopsis of the Bank of Japan’s (BOJ) July meeting minutes unveiled a member’s suggestion for a more adaptable approach to yield curve control (YCC), aimed at navigating upside and downside risks while effectively continuing monetary easing.
In the realm of precious metals, gold prices concluded the prior week with a downturn, influenced by the retreat of the 10-year US Treasury note yield following the release of US labor market data for July. With the 10-year Treasury yield remaining above 4% early on Monday, XAU/USD encountered challenges in building on Friday’s gains and currently hovers below $1,940.
Meanwhile, Bitcoin experienced limited movement within a narrow range over the weekend, maintaining a hovering stance around $29,000. Ethereum encountered difficulties in establishing a definitive trajectory, confined within a tight channel above $1,800.
