The dollar index (DXY) ended little changed on Friday, supported by a 4% rise in WTI crude oil prices, which heightened inflation expectations and may lead the Federal Reserve to adopt tighter monetary policy. US economic data was mixed, with June housing starts rising 19% month-on-month to 1.427 million, surpassing expectations of 1.310 million. However, building permits fell 3% to 1.367 million, below the forecast of 1.403 million.
The University of Michigan July consumer sentiment index increased by 4.9 points to a five-month high of 54.4, exceeding expectations of 51.0. Additionally, the US July import price index (excluding petroleum) increased by 0.5%, higher than the forecast of 0.4%. Amid heightened US-Iran tensions and ongoing military actions, crude oil prices surged, impacting currencies such as EUR/USD and USD/JPY. The market anticipates a 14% probability of a 25 basis point rate hike during the next FOMC meeting on July 28-29.
In commodities, August COMEX gold closed up 0.67% and September COMEX silver improved by 0.25%, recovering from earlier losses. Central bank demand for gold remained robust, as China’s PBOC reported a 480,000-ounce increase in reserves, bringing total holdings to 75.44 million troy ounces.
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