DXY pares recent gains ahead of Yellen's speech

Friday, August 22, 2014

The dollar index pared recent gains yesterday with losses extended early on this morning as investors closed positions ahead of Yellen’s speech at Jackson Hole. After rallying to an 11 month high during intraday moves yesterday as the index reached 82.364, a level last seen in September last year, investors pulled back and opted to take short term profits. Bullish economic data for the US released yesterday increased speculation that the Fed may raise the base rate sooner than previously anticipated and with a dearth of major economic data releases today, all eyes will be on the central bankers at Jackson Hole today.

Spot gold prices breached support at the 200 day MA yesterday as prices reached their lowest levels since mid-June. The yellow metal slipped back towards $,1273/oz, on track to close lower for a second consecutive week as speculation that stimulus measure would be cut as the US economy continues to make solid progress sparked a 1.2% decline in prices yesterday as investors sold gold holdings in favour of riskier assets

Three month LME copper prices extended gains in overnight trading after yesterday’s session saw the metal falter around $7,000/tonne with wide intraday swings either side. Prices are on track to post solid weekly gains, up 2.8% at the time of writing, as the red metal snaps a three week decline spurred by weaker Chinese data this month. Investors are optimistic that the strengthening US housing market, which saw housing starts and building permits increase 15.7% and 8.1% m/m respectively in July, bode well for copper demand and have positioned themselves accordingly ahead of Yellen’s speech later today. 

DXY pares recent gains ahead of Yellen's speech

DXY Curncy DOLLAR INDEX SPOT 2014 08 22 08 02 30

3-M LME copper prices on track to post solid weekly gains 

LMCADS03 Comdty LME COPPER 3 2014 08 22 08 21 18

Events for today

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Yellen Speech at Jackson Hole

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Draghi Speech at Jackson Hole

Topics: Copper, Gold, DXY, LME
More from: Kash Kamal