As noted on Tuesday, the Greenback carried a bit of positive bias. It counteracted the bearish mood that had started earlier this week. This shift in momentum was primarily driven by persistent fears over US-China trade negotiations occurring in London. Traders are showing caution as they look ahead to the release of key US inflation data due out on Wednesday.
As the week continued, the Greenback was buoyed by the following. This reassurance triggered some of the biggest movements in dozens of currency pairs and commodities in a decade. The USD/JPY exchange rate jumped to two-week highs, near 145.30. In the background, the Japanese Yen continues on its death spiral path, plummeting to new depths against the US dollar.
In fact, this morning, silver prices plunged by close to $10.00 after hitting a high of just a hair under $37.00 per ounce on Friday. This surge represented the biggest increase for silver since February 2012. The recent upturn created a three-day winning streak. Traders decisively readjusted to the unfavorable conditions of the broader market, leading to a reversal.
At the same time, WTI crude oil futures have blasted above the $66.00 per barrel level to establish new two-month highs. This record-setting rise comes despite continued supply worries, as well as geopolitical developments that have propped up oil prices in recent weeks. After a close above $1,900 on Monday, gold prices exhibited a great deal of indecision on Tuesday. They retreated from Monday’s gain, but remained above the $3,330 per troy ounce level.
The AUD/USD pair showed a lot of tenacity, holding its daily gains despite AUD weakness, firmly above the 0.6500 mark. This stability is a clear sign of the Australian dollar’s safe haven qualities even with shifting market sentiments and economic data.
The histories of the Greenback movement and various commodities are both illustrations of how market forces can work. Traders continue to strategically maneuver through the fogginess of global trade relations and the busy calendar of key economic data releases. This week’s inflation readings will play an outsized role in setting market expectations. They will further factor into the Federal Reserve’s forthcoming decisions on interest rates.