Trading volumes were also seen to remain light with no major US data report to be published throughout the day.
Investors set aside Monday data which presented the German Ifo business climate index nudged lower to 108.3 in July from 108.7 in the previous month, compared to forecasts for a decline to 107.5.
Nonetheless, positive US data posted during that period continued to boost hopes for a rate increase by the Fed in the near-term, possibly as early as September. Despite several investors project the US central bank to keep its monetary policy unchanged this week, it could give clues on the timing of future rate hikes.
At present, interest rate futures are pricing in a 45% chance of a rate increase by December, compared with last week’s 20% and up from 9% at the beginning of July.
Market players also await BoJ’s policy statement on Friday, amid rising bets for the declaration of further stimulus measures. This could include slashing of rates deeper into the negative and more aseet purchases.
The US dollar index, which gages the greenback’s strength vs. the six major currencies, held steady at 97.42, just off the new four-month peak of 97.62 reached overnight. Earlier today, it valued at 97.40, supported by the differing monetary policy outlook between the Fed and other global central banks.
Elsewhere, in commodities trading, gold plunged on firmer equities—namely the waning Brexit impact on the US and positive US economic data which also boosted the dollar. Spot gold plunged 0.4% at $1,316.16 a troy ounce. Bullion declined 0.7% last Friday, falling for a second week now. US gold toppled 0.5% to trade at $1,316.20 an ounce.
With all the events for the day and set for the week, the currency pairs’ values have trickled down to the following:
- EUR/USD held steady at 1.0982, lingering near to Friday’s one-month trough of 1.0951.
- USD/JPY was barely changed at 106.19.
- GBP/USD gained 0.10% to trade at 1.3122, since the British pound remained higher still against the dollar.
- USD/CHF was steady at 0.9869.
- AUD/USD inched higher 0.29% at 0.7486, with the Australian currency stronger than the greenback.
- However, NZD/USD dipped 0.14% to trade at 0.6989.
- USD/CAD jumped 0.36% to trade at 1.3175, near Friday’s two-month highs of 1.3186.
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