Dollar Index Declines and Gold Rises: The dollar index fell on Monday amid expectations of weak trading volume
throughout the session during the holiday in the United States,
while the price of gold rose sharply and exceeded $2020 to achieve an increase for the third consecutive session.
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Dollar Declines in Weak Holiday Trading
Oil Retracts from Its Highest Levels in Three Weeks
Gold Rises Strongly at the Beginning of the Week
Dollar Declines in Weak Holiday Trading
The dollar index fell around 104.2 on Monday,
with expectations that trading volume will remain weak
throughout the session amid a holiday in the United States.
Last week, the dollar jumped about 1% to reach its highest levels
in three months before giving up most of those gains as investors reacted to mixed US economic data.
The latest data showed that consumer and producer prices
in the United States rose more than expected in January,
while US retail sales fell faster than expected last month.
Traders are now postponing their bets on the first interest rate
cut by the Federal Reserve until June from March.
Markets also see less than 100 basis points of total easing this year,
a significant decrease from the cuts of about 150 basis points at the beginning of the year.
Oil Retracts from Its Highest Levels in Three Weeks
West Texas Intermediate futures fell below $79 per barrel on Monday
in a potential technical correction, while trading volume is expected to remain weak
throughout the session amid a holiday in the United States.
Investors also continued to assess demand conditions in China,
the largest importer of crude oil, as the country returned from the week-long Lunar New Year holiday.
Last week, oil prices rose by more than 2%, as geopolitical tensions
in the Middle East and OPEC+ efforts to restrict oil supplies supported the market.
However, the International Energy Agency warned in its monthly
report that global oil demand is losing strength, citing a significant decline in Chinese demand.
Additionally, stronger-than-expected US inflation data
and hawkish statements from central bank officials dashed hopes
of an early interest rate cut by the Federal Reserve,
further boosting bearish sentiment in oil markets.
Gold Rises Strongly at the Beginning of the Week
Gold rose above $2020 per ounce on Monday,
rising for the third consecutive session as the dollar weakened
amid increasing uncertainty about the Federal Reserve’s monetary policy.
Last week, data showed that consumer and producer prices
in the United States rose more than expected in January,
while US retail sales fell faster than expected last month.
Traders are now postponing their bets on the first interest
rate cut by the Federal Reserve until June from March.
Markets also see less than 100 basis points of total easing this year,
a significant decrease from the cuts of about 150 basis points at the beginning of the year.
Gold also rose due to safe-haven demand as geopolitical tensions remained high in the Middle East.”
Dollar Index Declines and Gold Rises