Market steadies as investors await GDP data

The greenback, which had sunk to a 13-month low midweek after the Fed’s policy statement suggested it was in no hurry to raise interest rates again, received a lift last Thursday, as Treasury Yields rose on the back of upbeat US durable goods and trade data. The focus remained on the second quarter US gross domestic product data as economists were expecting it to grow around 2.6% in the second quarter, from 1.4% in the first quarter. A solid outcome will no doubt give the Dollar some respite from the recent sell-off.

Oil prices edged lower early last Friday but were still near eight-week highs, buoyed by a decline in US inventories and OPEC’s ongoing efforts to curb production. According to data released last Wednesday from the Energy Information Administration, US Crude Stocks fell sharply by 7.2 million barrels in the week to July 21 due to strong refining activity and an increase in exports. Moreover, Oil prices have been supported by a further agreement between OPEC and some non-OPEC members to limit Nigerian Oil output and encourage several members to comply with their pledged production cuts.

Last week as well, the Swiss Franc extended an overnight decline against the Euro, on bets that a tapering announcement by the European Central Bank later this year will spur more selling of the haven currency. The Euro jumped as much as 0.8% against the Franc, as purchases of the common currency by Japanese banks for their daily requirements triggered buy-stops. The currency pair had advanced for four straight days, touching the highest level since 2015, after Swiss National Bank President Thomas Jordan said earlier last week that the Franc is “significantly overvalued.”