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Metals retreated during the US session, with gold falling below $1,920 and moving closer to the $1,915 support region. At monthly highs, the US Dollar Index is just beyond the 106.00 range. On Tuesday, there are no economic events scheduled for the Asian or European sessions. The US will release data on housing and consumer confidence later in the day.
The Chinese Yuan continued to decline during the American session due to lingering worries around the Evergrande crisis, which is likely to be in the news.
Prior to declining to 105.90, the US Dollar Index surged to 106.09, its highest level since November. Because of the cautious market environment and increased US Treasury yields, the US dollar is still strong. The yield on the 10-year note increased to 4.54%, the highest level since October 2007.
The US economy’s resiliency is the basis for the idea that high interest rates will last longer. The Core Personal Consumption Expenditures Price Index, the Fed’s favoured inflation indicator, is expected to be released on Friday.
EUR/USD posted its lowest close since March, falling below 1.0600 after five consecutive days of decline. The Euro weakened despite European Central Bank (ECB) President Lagarde’s comments at the European Parliament, where she mentioned that rates will remain restrictive for as long as necessary. EUR/GBP pulled back from 0.8700 to 0.8670.
The Sterling dropped to fresh lows against the US Dollar, briefly reaching levels below 1.2200. The currency is still affected by the Bank of England’s dovish stance in its recent policy decision.
USD/JPY broke above 148.50, reaching the highest levels since October and approaching 149.00. Despite concerns about an intervention from Japanese authorities, the pair’s rally remains largely unabated.
The Canadian Dollar outperformed on Monday, with USD/CAD modestly falling to 1.3450. In contrast, the Australian Dollar lagged among commodity currencies, with AUD/USD approaching 0.6400. However, the pair trimmed its losses and settled around 0.6420.
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