Dollar Breaks Through 107 And Oil Is Above 90

Seasons of violent fluctuations continue, coinciding with the release of exciting and surprising economic data to the markets, which leads traders to rush from high-risk assets to safe havens.

Also, the unemployment data was released a little while ago, which came higher than the market expectations, hours after the release of the minutes of the US Federal Reserve meeting on Wednesday.

Wall Street is going down

After 6 consecutive gains that were interrupted after the release of the US Federal Reserve minutes yesterday, it seems that the Dow Jones Industrial Average is on its way to recording a second consecutive decline, as it started today's early trading lower.

The Dow Jones Industrial Average declined during these moments of trading today, Thursday, in the range of 0.3%, or the equivalent of 90 points, down to the levels of 33.92 thousand points.

On the other hand, the broader Standard & Poor's 500 Index declined by 0.25%, or the equivalent of losses of 10 points, while the Nasdaq Technology Stock Index declined by 0.3% or the equivalent of 30 points.

Gold

On the other hand, gold turned towards the green zone, rising around $8, reaching levels near $1783 an ounce, up by 0.4%. This comes amid the Fed officials' confirmation of continued efforts to confront inflation to reach the Fed's target at inflation rates of around 2%, while it is now recording the highest rates in 40 years.

China's gold imports from Switzerland rose to their highest levels since December 2016, after the Swiss Federal Customs Administration said that China shipped more than 80 tons from Switzerland in July, worth 4.4 billion Swiss francs ($4.6 billion), more than double from June.

Switzerland's gold exports rose to 186.2 tons in July, including 15.8 tons to India, while Switzerland imported 261 kilograms of Russian gold, bringing its total imports in the last three months to 3.6 tons.

Dolar

On the other hand, the US dollar index rose against a basket of major currencies to levels near 107 points, as it crossed 107.18, up by 0.6% against a basket of major currencies.

This came after the main dollar index rose against a basket of major currencies, as it rose by 0.555 against Euro and rose by 0.1% against the Yen and rose against the Pound Sterling by 0.4%, and by a slight percentage in the range of 0.1% against the Australian Dollar.

While US bonds gave up their morning gains, the 10-year US Treasury yield fell below 2.9%, while it is now rising near 2.857%.

Oil

Oil succeeded during these moments, despite the rise in the dollar index, to expand its gains by more than 2%. The dollar's rise leads to an increase in the cost of acquiring oil for importers.

NYMEX crude rose above the levels of 90 dollars, reaching levels of 9.2 dollars a barrel, an increase of 2.1 dollars, or 2.5 percent, during these moments of trading on Thursday.

While the benchmark Brent crude rose by 2.4%, or the equivalent of 2.3 dollars a barrel, to jump during these moments of trading today, Thursday, to levels near 96 dollars a barrel.

Brent crude will return to $125 a barrel by the end of 2022, Brent said, while Brent has fallen 25% since mid-June, weighed by recession fears and rising export volumes.

Earlier, Barclays Bank (LON: BARC) cut its Brent crude price forecast to $103 a barrel for this year and next, from its previous estimate of $111 a barrel, due to the flexibility of the Russian oil supply and an expected surplus in the market.

Important data

The number of applications for unemployment benefits in the United States fell for the first time by two thousand to 250 thousand in the week ending August 13th, compared to an expected arrival of 264 thousand applications.

The average number of jobless claims in the past four weeks decreased by 2,750 from the previous week's average by two thousand applications, to 249.5 thousand to reach 246.75 thousand, marking the first decline since the beginning of April.

The annual inflation rate in the euro area rose to 8.9% in July 2022, after it recorded 8.6% in June, while it reached 2.2% in the same month of 2021. This rise came due to the rise in energy prices by 4.02% in addition to the increase in food prices by 2.08% and services by 1.6 percent.

Overview

Mining expert Jake Klein, CEO of Australia's Evolution Mining Ltd, said gold could rise above $2,000 an ounce next year as inflation continues to rise.

Federal Reserve officials said in their last meeting last July that the policy of raising US interest rates should continue until inflation slows sharply from its current levels.

Fed officials added that the Fed may move to slow the intresret rate at some point while acknowledging downside risks to GDP growth.

The minutes of the Federal Reserve's meeting held last month showed that members of the Open Market Committee believe that it is necessary to move interest rates, which means levels high enough to slow economic growth.