The Greenback continued its downward trend during the week and broke below the key 101.00 barrier against the backdrop of persistently low US yields and speculation of a potential half-point interest rate cut by the Fed. The US Dollar Index (DXY) faced further losses and tested the 101.00 support ahead of the release of the US labor market report on Friday. The release of crucial economic data such as Nonfarm Payrolls and the Unemployment Rate, along with a speech by the Fed’s Williams, kept investors cautious.
EUR/USD strengthened as it surpassed the 1.1100 barrier, benefiting from the weakening US Dollar. Economic data releases such as the German Balance of Trade results, Industrial Production, and the third estimate of Q2 GDP Growth Rate are expected on September 6. GBP/USD also rose towards the 1.3200 hurdle amid Dollar weakness, with upcoming data including the Halifax House Price Index and BBA Mortgage Rate.
USD/JPY declined to four-week lows below the 143.00 support level due to a weaker Dollar, lower yields, and hawkish comments from a Bank of Japan official. Economic data releases including Household Spending, preliminary Coincident Index, and Leading Economic Index are scheduled for September 6. AUD/USD rebounded above the 0.6700 barrier on the back of a weaker Greenback, recovering commodity prices, and a cautious tone from the Reserve Bank of Australia’s Bullock. On September 6, Home Loans and Investment Lending for Homes data will be released.
In the commodities market, WTI prices reached a new 2024 low near $68.80 before recovering slightly following positive news from OPEC+ and a bullish report on weekly US crude oil inventories. Gold prices climbed above $2,520 per ounce, driven by a weaker US Dollar and declining US yields. Silver also rallied to weekly highs, surpassing the $29.00 mark per ounce and hovering around the 55-day and 100-day SMAs.
In conclusion, the Greenback faced downward pressure throughout the week, with the US Dollar Index testing the key 101.00 support level. Major currency pairs such as EUR/USD and GBP/USD benefited from Dollar weakness, while USD/JPY dropped to four-week lows. In the commodities market, WTI prices experienced volatility, with Gold and Silver prices climbing higher on the back of a weaker Dollar and shrinking US yields. Economic data releases and central bank speeches are expected to drive market sentiment in the coming days.
