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Dollar Eases As Fed Seen Softening Inflation Stance, Gold Soars To All-Time High

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Asian shares surged, supported by tech gains, while gold hit an all-time high as China and the United States tensions rattled investors. Meanwhile, The U.S. Treasury yields edged lower, with the benchmark 10-year note yield trading at 0.583%.

Gold prices rallied to record highs as an intensifying U.S.-China row dented the dollar and cemented expectations that central banks would continue pumping out stimulus to ease the economic stress from a worsening coronavirus pandemic. Spot gold rose 1.7 percent to $1,933.66 per ounce, after hit an all time high of $1,944.77.

Fx Markets :

The dollar index (USD) slumped to a near 2-week low, after labour data last week showed the U.S. employment recovery wobbling. Investors drove away from the world’s reserve currency amid cracks in the U.S. economic recovery. The dollar index traded 0.4% lower at 93.99, after touched a low of 93.84 earlier, its lowest since September 2018.

The euro (EUR) rallied to a fresh near 2-year peak against dollar, as the 750 billion euro fund that European Union leaders agreed last week will make the bloc more stable. EUR/USD traded 0.5% higher at 1.1714, having touched a high of 1.1725 earlier, its highest since September 2018.

USD/JPY slumped to an over 4-month trough, as a standoff between Washington and Beijing showed no signs of abating with both sides ordering the closure of consulates in Chengdu and Houston. Moreover, the coronavirus outbreak also continued to worsen, with more than 16.13 million people cases globally and 644,836 deaths. The pair was trading 0.6% lower at 105.48, after hit a low of 105.38 earlier, its lowest since March 16.

Pound (GBP) rallied to a 4-1/2 month high, as data released last week showed retail sales recovered to almost pre-lockdown measures in June. However, GBP/USD trimmed early session gains as investors focused on the lack of progress in trade talks with the European Union. GBP/USD traded 0.1% higher at 1.2808, after hit a high of 1.2858 earlier, it’s highest since March 11. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers.

The Australian dollar (AUD) surged, recover previous session losses, as the greenback eased across the board. AUD/USD traded 0.3% higher at 0.7126, after hit a high of 0.7183 on Wednesday, it’s highest since late April 2019. Investors will continue to track overall market sentiment, ahead of U.S. economic releases.

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