The Dollar Continues to Decline While Oil Stabilizes

Market News Summary

The Managing Director of the International Monetary Fund, Kristalina Georgieva, stated that the global economy will grow at an annual rate of 3% over the next five years. The IMF had reduced its projections for global economic growth in 2023 and 2024 by about 0.1% in April compared to its January estimates. The IMF expects the global economy to grow by 2.8% this year and 3% in 2024.

European indices rose at the end of the trading session on Tuesday, July 11, amid anticipation of inflation data in the United States and the release of economic data in Europe.

At the end of the session, the STOXX600 index rose by about 0.72% to 451 points, while the German DAX rose by 0.75% to reach 15,790 points. The UK’s FTSE increased by 0.12% to 7,282 points, and the French CAC closed higher by 1.07% at 7,220 points.

Dollar index (USDX)

The dollar declined, hitting its lowest level in two months after officials at the U.S. Federal Reserve indicated that the tightening cycle is nearing its end. Meanwhile, the pound sterling rose to its highest level in 15 months following stronger-than-expected wage growth in Britain.

The statements led to the dollar’s decline to its lowest level in two months against a basket of currencies, reaching 101.00, as market participants lowered their expectations regarding the size of additional interest rate hikes.

Pivot point: 101.40

Spot Gold (XAUUSD)

Gold prices rose during Tuesday’s trading session, amid the decline of the U.S. dollar and in anticipation of inflation data in the United States.

The dollar recorded its lowest level in two months during Tuesday’s session, and the yield on 10-year U.S. Treasury bonds declined for the second consecutive session. Analysts’ expectations indicate that inflation in the United States slowed down in June to around 3.1%, compared to 4% in May.

At the close, gold futures rose by about 0.3% or $6.1 to $1937.1 per ounce, marking the highest settlement price for the most active contract since June 21st.

Pivot point: 1931

Dow Jones Index (DJ30ft – US30)

US indices closed higher collectively in yesterday’s Tuesday session, supported by gains in bank stocks ahead of the announcement of financial companies’ earnings and amid anticipation of US inflation data.

Inflation data is scheduled to be released today, while the Producer Price Index report is expected to be released tomorrow. It is also expected that the results from JPMorgan and other major banks will start coming out later this week.

The Dow Jones index rose by 0.9%, equivalent to around 317 points, achieving its highest daily gains in 3 weeks. The S&P 500 index also rose by approximately 0.7%, closing near its highest levels in 14 months, while the Nasdaq Composite index increased by 0.55%, closing near its highest levels in 15 months.

Pivot point: 34330

US Crude (USOUSD)

Oil prices stabilized in early Asian trading today, Wednesday, July 12, as hopes of increased demand in developing countries and the reduction in oil supplies by major oil-exporting nations offset concerns about economic slowdown leading to rising US crude inventories.

Brent crude futures fell four cents to $79.36 per barrel, while West Texas Intermediate (WTI) crude, the US benchmark, dropped one cent to $74.82.

Prices have faced pressure from the increase in US crude inventories by around three million barrels in the week ending on July 7, according to data from the American Petroleum Institute.

Pivot point: 74.25

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