The benchmark ICE U.S. Dollar Index DXY, -0.23%

Data last week showed that the U.S. created 223,000 new jobs in May, pushing unemployment down to an 18-year low of 3.8%. That news reinforced expectations the Fed will raise interest rates at least two more times in 2018 following its March rate increase, possibly as soon as this month.
Rising real interest rates impact the opportunity costs of holding gold because the metal provides no yield, and entices investors to rotate into riskier assets like stocks. Higher rates may also boost the value of the dollar, which usually moves in the opposite direction of the gold price.

“Concerns over the path of protectionist policies that the U.S. is taking could resurface as the [Group of Seven] prepares to meet in Canada this week…” said Richard Perry, analyst at Hantec. “This is leading to a degree of consolidation across forex and commodities markets.”
G-7 nations will hold talks in Canada on Friday and Saturday, where tariffs and trade are likely to be discussed. This weekend’s rebuke by G-7 finance ministers of the Trump administration’s trade tariffs could add some stress to the gathering.

Commentaires

Enregistrer un commentaire

Posts les plus consultés de ce blog

Beijing may have removed missiles from disputed South China Sea island

Image
"I hope the US can explain to everyone: Isn't it militarization when you send attacking weapons like the B-52 bombers to the South China Sea? Were the B-52s there for freedom of navigation and overflight? If someone frequently flexes his muscles or snoops around near your house, shouldn't you raise your alertness and improve your defense capabilities?" Chinese Foreign Ministry spokeswoman Hua Chunying said at a regular press conference. "China will not be intimidated by any planes or ships. We will only be firmer in our resolve to take all necessary measures to safeguard our sovereignty and security as well as maintain peace and stability in the South China Sea."
Lire la suite

What we find even more amazing is that despite their growing

Image
What we find even more amazing is that despite their growing lack of faith in their models (models that the FT describes as fiendishly complicated), some central bankers still believe that forward guidance (aka simple jawboning) is an effective policy tool even when they are worried that their fiendishly complicated models are not up to scratch. Let’s just say we’re sceptical on this front. In fact, we’re pretty sceptical whenever a central banker speaks nowadays, as they are often self-serving, duplicitous and completely ignorant of the unintended consequences which we truly believe are yet to be seen from their audacious monetary policy experiments of the last decade. A number of central bankers were either speaking publicly or being interviewed by the media in Washington. Outgoing Fed vice chair Fischer said the US has room for more investment and consumption. Dallas Fed president Kaplan said that business activity was strong and the consumer was in good shape. St Louis Fed presi...
Lire la suite