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While U.S. shares were higher after the close on Friday, the dollar fell against a basket of global currencies due to the fact that data showed a slowdown in inflation continued in July. At the close in NYSE, the Dow Jones Industrial Average inched 0.07% higher, the S&P 500 index added 0.13%, and the NASDAQ Composite index jumped 0.64%.
By contrast, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.32% to 93.01 on Friday. The greenback was data released by the Labor Department that showed the Consumer Price Index (CPI) edged up 0.1% in July after being unchanged in June. On a yearly basis, inflation rate increased to 1.7% last month from 1.6% in June. Analysts had expected the CPI to rise 0.2% in July which would send the year-on-year rate to 1.8%.
While inflation continued to slow down in July which weakens the possibility of the Federal Reserve to raise its rate for the third time this year, Dallas Fed President Rob Kaplan on Friday claimed that the Fed’s key interest rate is getting close to a “neutral” level, therefore, the central bank should patiently wait for further evidence indicating that inflation will rise before hiking rate again.
On Wednesday, the Federal Reserve will release minutes of its most recent policy meeting where it left interest rates unchanged as widely expected. Before the Fed FOMC meeting minutes, the Commerce Department on Tuesday will publish data on July retail sales which is forecast to rise 0.4% last month, after dipping 0.2% in the preceding month.
Core sales are anticipated to reverse higher, jumping 0.3% following a decline of 0.2% in June.
In addition to data on retail sales, report about building permits, housing starts and industrial production will also draw market attention.
Turning to the British Pound, the U.K. Office for National Statistics will release data on consumer price inflation for July on Tuesday amid expectations calling for a rise to 2.7% from 2.6% a month earlier. The UK is to publish its monthly employment report on Wednesday before producing retail sales data on Thursday.
The euro zone will publish revised second-quarter growth data on Wednesday. An initial estimate released earlier this month pointed to a growth rate of 0.6% in the three months ended June 30, marking an increase from growth of 0.5% in the first-quarter. After publishing the report on Q2 GDP, the euro zone is to release revised inflation data on Thursday.
On Monday, China is to release July industrial production figures which are expected to slow down to 7.2% from a gain of 7.6% in June. Also on Monday, Chine will release reports on July fixed asset investment and retail sales.