Dollar Extends Gains, Tech Stocks Rally


The dollar index which measures the performance of the United States dollar against a basket of major currencies extended its upside rally, trading at 92, for the first time since mid-April. The markets grasped the Federal Reserve policy meeting as a dollar booster, as the Fed upgraded its inflation projections and the dot plot revealed that officials are excited about raising interest rates earlier than previously anticipated. The EURUSD declined to $1.1895, the GBPUSD fell to $1.3895, and the USDCAD soared to 1.2380.


Futures tied to major US stock indices had a mixed performance. The Dow Jones Industrial Average slipped further while tech/growth stocks cheered the drop in treasury yields. The US 10-year yields couldn't hold gains earned post the Fed meeting and declined to 1.469% again. The tech-heavy Nasdaq futures rallied to an all-time high of 14202, the S&P500 recovered to 4218, while the Dow Jones Industrial Average futures fell to 33666.


Precious metals prices sold off for the second day as the dollar strengthened, but the falling US yields pushed prices towards a slight recovery. The price of a gold ounce recovered to $1787 after testing a low of $1767, the lowest since early May. The price of silver ounce bounced back to above $26, while palladium held steady near $2550.


Oil prices fell further as the dollar recovered. Benchmarks hit their highest levels in multi-years as investors are optimistic about the oil-demand recovery with OPEC+ holding their plans, and the world's superpowers' negotiations with Iran over the nuclear deal are still undone. However, the soaring dollar pushed commodities lower. The West Texas Intermediate crude July futures dipped to $70.31, and the Brent blend August delivery declined to $72.29.

Major Economic Events

GMT Country Event Expectation Previous
10:00 EZ  EU Finance Ministers Meeting  - -
17:00 US  U.S. Baker Hughes Oil Rig Count - 359



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