The dollar once again posted gains against major peers as market participants began to price in a hawkish Fed outcome ahead of this week’s FOMC meeting. After rallying strongly throughout late August and during the first week of September the dollar index remains in a rangebound pattern as it continues to consolidate around recent highs with support on the downside towards 84.00 holding firmly while intraday gains tested recent highs towards 84.400 earlier on. Despite the greenbacks inability to breakout significantly higher, the modest gains posted today add to the nine straight weekly gains against its major peers as bullish US macro data increases speculation among market participants that the Fed may adopt a fresh hawkish stance as tapering of bond buying winds down.
The optimistic outlook in the run up to the Fed meeting saw downward price pressure on spot gold prices persist in the first session of the week as intraday gains towards $1,240/oz failed to gain traction with prices trading just above $1,230/oz at the time of writing, towards the end of the European session.
European equity markets spent much of the session in negative territory as renewed risk aversion among investors in the run up to the Scottish referendum and the FOMC meeting meant many investors steered clear of risk assets. London’s blue chip index traded sharply lower immediately at the open before recovering towards the end of the session while the CAC spent the entire session in negative territory on wider eurozone risks as the situation between Russia and Ukraine showed no signs of improving. The rouble shed further ground against the dollar today, trading below 38.36 against the dollar as investors remained cautious over the stability of the most recent ceasefire. The currency has lost almost 14% against the dollar since the beginning of July as the currency remains on track to weaken for a fifth straight session against the USD.