China surprised markets by cutting major short- and long-term interest rates in July, its first such broad move in almost a year, signalling policymakers’ intent to strengthen economic growth.
Weakness in the dollar comes just days before an address by Fed Chair Jerome Powell at the Jackson Hole Symposium on Friday, where he is expected to offer more cues on a rate cut.
Spot prices hit a record high of $2,510.45 an ounce last week, with the yellow metal logging strong gains amid growing conviction that the Fed will begin cutting rates from September.
Selling pressure from concerns over token distributions by defunct crypto exchange Mt Gox also appeared to have cleared, while data on Monday showed crypto investment products saw some positive capital flows over the past week.
With the data calendar relatively light across major economies this week, all eyes are on Wednesday’s release of the Fed’s July meeting minutes and Chair Jerome Powell’s speech at Jackson Hole on Friday for clues on the outlook for U.S. rates.
Moreover, retail sales for July beat expectations, suggesting strong real consumption growth. Also, initial jobless claims have declined over the past two weeks, aligning with the idea that the previous increase was partly due to weather and residual seasonality effects. The Financial Conditions Index (FCI) has also eased since the payroll report.
The U.S. dollar fell Monday ahead of the release of minutes from the Federal Reserve’s July policy meeting and Chair Jerome Powell’s upcoming speech at Jackson Hole later this week.
Both benchmarks fell nearly 2% last Friday as investors tempered expectations of demand growth from China, but ended the week largely unchanged from a week earlier after a batch of U.S. data last week showed inflation was moderating and retail spending was robust.
Further highlighting the lack of momentum in the market is the lack of convergence of the 50-day and 200-day moving averages, which normally points to possible bullish or bearish trends. Recent on-chain data highlights the lack of significant whale activity, which further implies that big investors are not interested in the asset right now, which…
European shares fluctuated on Monday after their best weekly gain in three months, as investors braced for a data-heavy week with a focus on U.S. Federal Reserve Chair Jerome Powell’s speech at Jackson Hole for clues on potential rate cuts.
