The dollar index (DXY) dropped by 0.03% on Tuesday due to a combination of falling crude oil prices and disappointing U.S. economic data. The U.S. June trade deficit was reported at $73.3 billion, slightly above estimates of $73.0 billion, while factory orders unexpectedly declined by 0.3% month-over-month, contrary to predictions of a 0.2% increase. Additionally, June JOLTS job openings fell by 178,000 to 7.359 million, missing the forecast of 7.454 million.
As crude oil prices fell more than 5% to a three-week low, inflation expectations diminished, influencing the markets to factor in a 58% probability of a 25 basis point rate hike by the Federal Reserve during the September 15-16 meeting. Meanwhile, the euro rose by 0.19% amid dollar weakness, and the yen appreciated by 0.39%, although it remains affected by weak interest rate differentials.
In commodities, October gold closed up $61.60 (1.52%), and September silver increased by $2.389 (4.13%), supported by the drop in crude prices. Meanwhile, China’s PBOC gold reserves increased by 480,000 ounces to 75.44 million troy ounces in June, marking the twentieth consecutive month of growth.
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