The Greenback extended its Friday’s rally, with little data from the market, and stocks fell after posting new highs. The Dow Jones fell by 0.34% or 32 points to 9,337 with a similar decline in the S&P Index which fell 0.33% to 1,007, crude oil closed down by $0.33 at $70.60, and gold broke below $950 closing $945. The Dollar strength was limited and traded mostly within tight range, unless for the pound which dropped most among major currencies due to continued concerns about the £50B Quantitative Easing expansion, which suggests that worst may not be over yet and still there’s fears of deflation risks, where inflation report on Wednesday could give us a clearer image. The GBP/USD dropped more than 600 pips since its peak last Wednesday at 1.7040 to bottom at 1.6430.
The Euro was little changed against the dollar dropping by 30 pips to close at 1.4144. The Eurozone Sentix Investor Confidence Index came better than expected, rising from -31.3 to -17.0 in July, the highest level in one year. The Yen was able to rebound after the huge loss on Friday, supported by a drop in the stock market and better than expected Japanese machinery orders.
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