Market Drivers; US Session: Will Fresh Data Help the US Dollar?

The US Dollar began the week on a weaker note as markets grappled with the potential impact of further tariffs and anticipated the upcoming Federal Reserve meeting. The US Dollar Index (DXY) experienced moderate losses, although it partially recovered after touching a low near 107.00. Meanwhile, the Euro strengthened against the Dollar, reaching a yearly high, driven by the weaker greenback. However, these gains were partially reversed later in the day. The British Pound traded mixed against the Dollar, briefly surpassing the 1.2500 level.

The Japanese Yen saw a significant surge against the Dollar, reflecting a shift in investor expectations regarding the Bank of Japan’s monetary policy. The Australian Dollar weakened after the release of disappointing Chinese PMIs. Crude oil prices declined sharply amid uncertainty surrounding potential US tariffs. Gold and Silver prices also corrected lower, with Gold testing multi-day lows near $2,730 per ounce.

Looking ahead, several key US economic data releases are expected to influence market sentiment. These include Durable Goods Orders, the House Price Index, Consumer Confidence, and the Richmond Fed Manufacturing index. These data points will provide valuable insights into the current state of the US economy and could significantly impact the Federal Reserve’s policy decision on Wednesday.