Dollar Slips as Stock Strength, Weaker Economic Reports Offset Hawkish Comments
The US dollar is down by 0.20% today due to stock strength reducing demand for liquidity in the dollar, and weaker-than-expected economic reports.
The July ADP employment change rose by +44,000, which was lower than the expected +65,000. The July ISM services index also fell short of expectations at 54.1 compared to 54.5.
However, Kansas City Fed President Jeff Schmid's hawkish comments have limited losses in the dollar, as he stated that tighter monetary policy is needed to reduce inflation.
The euro has gained support from a weak dollar and a revised upward Eurozone July S&P composite PMI of 52.0 from 51.9. The yen is also moving higher on hawkish minutes from the BOJ's June 15-16 policy meeting, where most board members saw upside risks to underlying inflation.
Gold and silver prices are sharply higher today due to a weaker dollar and improved prospects for the reopening of the Strait of Hormuz. Precious metals are also climbing due to strong central bank demand, with China's PBOC reserves rising by +480,000 ounces in June.