The dollar index (DXY) increased by 0.05% today, finding support after WTI crude oil prices rose over 2% to a one-week high. This reflects rising inflation expectations that could lead the Federal Reserve to tighten monetary policy. However, the dollar retreated after reports indicated that the U.S. and Iran might be nearing an arrangement to reopen the Strait of Hormuz, impacting crude prices.
In housing data, U.S. existing home sales for July fell by 1.7% month-over-month to 4.06 million, aligning closely with expectations of 4.05 million. Meanwhile, the market anticipates a 48% chance of a 25 basis point rate hike at the next Federal Open Market Committee meeting on September 15-16, while there is an 88% probability for the European Central Bank raising rates by the same margin on September 10.
The precious metals market is mixed, with October COMEX gold rising by $25.80 (+0.59%) and September COMEX silver decreasing by $0.312 (-0.48%). Gold reached its highest price in 2.25 months amid speculation that the upcoming U.S. July CPI report might show easing core inflation, which could influence Fed policy. Central banks globally, including China’s PBOC, have increased their gold reserves, further supporting prices despite a stronger dollar and rising crude oil prices that could spur central banks to tighten monetary policies.
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