Dollar stabilizes after last week’s decline, eyes on key US data

The US Dollar Index stays relatively quiet near 104.00 early Monday after having closed the previous week modestly lower. US stock index futures trade flat on the day as focus shifts to May Durable Goods Orders data. Pending Home Sales and the Dallas Fed Manufacturing Survey data for June will be featured in the US economic docket as well. The European Central Bank (ECB) Forum on Central Banking will start later in the day with ECB President Christine Lagarde delivering the opening remarks at 1830 GMT.

San Francisco Fed President Mary Daly said she is prepared to support another 75 basis points rate increase in July. Ahead of the weekend, St. Louis Federal Reserve Bank President James Bullard reiterated that they need to continue to frontload rate hikes to get inflation under control. Supported by the recent hawkish commentary, the 10-year US Treasury bond yield is up nearly 1% on the day at 3.15%.

Meanwhile, the International Monetary Fund (IMF) said in its annual assessment that the US economic growth expectation got revised lower to 2.9% for 2022 from 3.7% in April’s forecast. “Based on the median projection for the policy rate published at the June FOMC meeting, we expect the US economy will slow in 2022-23 but narrowly avoid a recession,” the IMF noted in its publication.

EUR/USD clings to small daily gains and fluctuates above 1.0550 early Monday. The pair gained nearly 100 pips last week.

GBP/USD continues to move up and down in a narrow channel below 1.2300 for the fourth straight trading day. Later in the day, members of parliament will vote on proposed legislation to give ministers the power to scrap parts of the post-Brexit agreement. The European Union warned that it would be a breach of international law if the UK were to take unilateral action on the post-Brexit deal.

USD/JPY is moving sideways near 135.00 at the start of the new week. The Bank of Japan’s (BOJ) June meeting Summary of Opinions showed that the bank will maintain its loose policy while keeping a close eye out on markets.

Gold trades in the upper half of its consolidation channel above $1,830. Over the weekend, four G7 members decided to ban imports of Russian gold to tighten the sanctions squeeze on Moscow.

Bitcoin trades above $21,000 in the European morning. Ethereum is up nearly 2% on a daily basis near $1,200.

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