The dollar struggled near 3-1/2-week lows against its peers on Monday after U.S. jobs data showed slower-than-expected wage growth, even though the US economy continues to add jobs at a strong pace. For the USD to get back on track and reverse this negative momentum, it’s all about this week’s US CPI print.
EUR/USD is rising steadily into new two-week highs, after the NFP release on Friday. Mario Draghi is scheduled to testify at 1300 GMT and again at 1700 GMT, before the Committee on Economic and Monetary Affairs of the European Parliament about the economy, monetary policy, and virtual currencies in Brussels. The EUR pairs could turn volatile during Draghi’s speech and the common currency may pick up a strong bid if the central bank chief sounds hawkish on interest rates.
USD/JPY is currently trading at 110.43 in Asia in a slow start to the week following a goldilocks nonfarm payroll that sent the dollar lower on profit-taking. USD/JPY fell from 110.70 to 110.40 while the US jobs data came out mixed. There was strong jobs growth in June but it was outweighed by the disappointing unemployment and earnings numbers.
The GBP/USD has been lifted near the 1.3300 major level, and even though broader markets are Dollar-bearish, the Pound can’t pull itself upwards as Brexit concerns continue to weigh. The UK’s Brexit minister David Davis resigned over the weekend, and Davis’ move spurred other hard-liners within the UK’s Brexit branch to resign as well, and PM May’s latest proposal for a soft Brexit is expected to face heavy challenges. Monday is slow on the economic calendar for the GBP, with only a speech due at 07:50 GMT from the BoE’s MPC member Broadbent.
Oil prices rose to $74.00 per barrel on Monday, after data last week showed U.S. crude inventories fell to their lowest in three years. Trade dispute between the U.S. and China remained in focus. The U.S. tariffs on $34 billion worth of Chinese goods came into effect on Friday and in response, China followed up by imposing duties on the same value of U.S. products.
For the better part of June and early July, US dollar strength and the dollar-bullish outlook continued to weigh on gold as stronger than expected US data and a hawkish Fed weighted gold prices down like an anchor. But last Friday’s NFP print is possible to deliver a softer US dollar profile this week, therefore opportunistic investors may return and support gold prices. After all, in this highly political and geopolitically charged environment, gold remains a safe haven.