Dollar Rebounds after Blow from US GDP Data

In the report of a lower-than-expected growth data in the US, the greenback had fallen last Friday. Today, however, the greenback managed to bounce back, nursing its losses.

On Monday, the dollar tended its losses from lows it reached after the announcement of a downbeat US growth data report before the weekend.

In a note by Marc Chandler, the global head of currency strategy at Brown Brothers Harriman, it was written that “the US dollar advance was stopped in its tracks by the disappointingly weak Q2 GDP figures.”

The dollar index was higher at a meager 0.1% at 95.578, recovering from its Friday trough of 95.384, the lowest level last seen on July 5.

Meanwhile, the euro nudged higher 0.1% to $1.1176 while the sterling climbed 0.2% to $1.3251. Investors turned their attention to the Bank of England’s decision on Thursday.

The Australian dollar was trading higher at $0.7608.

Elsewhere, non-farm payrolls report for July will be released on Friday. In a poll by Reuters, economists predict an increase of 175,000 jobs, lower from June’s 287,000 gain. Jobless rate is forecasted hovering steady at 4.9%.

Gold Tumbles amid Revived Rate Hike Hopes

The precious metal fell to a three-week trough on Wednesday, extending overnight losses in North American trade as possibilities for the Federal Reserve to raise interest rates in latter 2016 were rekindled.  Contributing to the gold slump are also the positive US economic outlook and US stock futures gains brought by upbeat earnings results.

These renewed expectations and optimistic economic picture boosted the greenback and thus, dragged down gold prices.

Bill O’Neill, a broker at LOGIC Advisors, said that: “Gold had everything going for it. Now we’re in a period where things are a lot calmer… The perfect playing field that existed for gold is not in play for the short term.”

On the Comex division of the New York Mercantile Exchange (NYMEX), gold sank 1.2% to a low of $1,316.00 a troy ounce, a level last touched in June 30 during the period Britain voted to leave the European Union. It last traded at $1,318.70 by 12:38 GMT, down 1.02%.

Nonetheless, the yellow metal remained supported amid talks that European and Asian central banks will ramp up monetary stimulus in the coming months to counter the negative economic shock by the British referendum last June 23.

Expectations for monetary stimulus tend to boost gold as the bullion is considered a safe-haven asset and inflation hedge.