Support
Gold prices correct after $2,500 surge
Markets await more guidance on the Fed’s policy direction amidst geopolitical tensions and possible rate cuts
The Japanese yen emerge as the strongest G10 currency
The EUR/USD pair is nearing year-to-date highs
WTI oil prices are hovering around $75.30 per barrel
Over the weekend and into the Asian session today, the market experienced a light flow of news, resulting in no major movements.
Currencies
Notably, the Japanese yen emerged as the strongest performer among the G10 currencies, this surge in the yen's value is somewhat unexpected, as there were no clear catalysts to explain the movement. But the drop might be influenced by dovish signals from the Federal Reserve earlier.
EUR/USD pair is inching closer to its year-to-date highs, trading near 1.1040 during early Monday session. As the Federal Reserve, have heightened expectations for a potential rate cut in September. Additionally, the Euro is gaining strength as markets anticipate a cautious and gradual reduction in interest rates by the European Central Bank (ECB).
Commodities
Gold prices are struggling to maintain momentum after briefly surpassing the $2,500 mark last week, which was a new record high. Monday's session saw some selling pressure as traders opted to take profits and await more clarity on the Fed’s future policy direction. The upcoming FOMC meeting minutes and Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Symposium are key events that traders will be watching closely. Despite the short-term pullback in gold, ongoing geopolitical tensions and the anticipation of the Fed beginning a rate-cut cycle in September are likely to provide support, limiting any significant declines.
Oil
In the energy markets, West Texas Intermediate (WTI) oil prices hovered around $75.30 per barrel during the Asian session on Monday. Concerns over weakening demand from China, the world's largest oil importer, are exerting downward pressure on crude prices. Recent data showed that China's industrial production grew by 5.1% year-over-year in July, slightly below expectations and marking the third consecutive month of slowing growth. This moderation in industrial output adds to the uncertainty surrounding global oil demand.
