The dollar index which measures the greenback against a basket of major currencies hovered near an eleven-week low at 96.62 amid growing chances of an interest rate cut. The US Treasury yields resumed their downfall yesterday erasing partial gains earned following the announcement of the migration deal between Mexico and the United States. The free fall in US Treasury yields drove the probability of an interest rate cut by the Federal Reserve in July by 25 basis points to 67.2%. However, investors' await the release of the May Consumer Price Index later today, where a better-than-expected reading could support the falling dollar as it reduces the chances of an interest rate cut which looks a bit stretched. The US 10-year yields fell to 2.122%, the USDJPY tumbled to 108.30, and the EURUSD climbed to $1.1340.
Precious metals prices surged as the dollar dropped along with US Treasury yields. The price of a gold ounce tested a low of $1321 then raced higher to $1336, the silver ounce rose to $14.82, and palladium hovered above $1400 for the first time since late April.
Oil prices tumbled amid growing signs that the trade war between China and the United States is likely to escalate. Despite the news that President Trump could be meeting the Chinese President XI at the G20 summit, the chances of reaching a deal remain low. On the other hand, the American Petroleum Institute reported a rise in US crude oil stock by 4.850 million barrels last week. The US Energy Information Administration will be reporting the official data later today. The West Texas Intermediate crude futures fell to a low of $52.17, and Brent futures tumbled to $61.08.