Dollar Rises Against Euro, Gold Falls

The U.S. Treasury 10-year yield remained near their lowest
levels since March, as investors continue to speculate that the Fed is done with
it’s tightening cycle. The CPI and PPI reports last week both pointed to a
slowing U.S. economy, with inflation not nearly as big of a problem as once
suspected. A housing report tomorrow could show a fall in sales, which
would further support claims that the Fed can pause the rate hikes.

The U.S. dollar traded higher against the euro and the yen
today, after the Fed Bank of Chicago’s President said that the central bank
might not be done raising rates. A report released in Germany today showed
investor confidence at its lowest level since 2001, which helped to send the
euro lower against the dollar and the yen. With that report, odds were
lowered that the ECB will raise rates before the year is out, putting the euro
on more even grounds with the dollar.

Crude oil futures rose 0.3% to close at $72.63 after Iran
issued a somewhat mild statement to the U.N., claiming that the country wanted
nuclear talks to progress. There is no resolution in sight, however, and
investors have been heavily pressured by the fighting in the Middle East, Iran’s
nuclear project and North Korea’s own missile tests. Natural gas rose
nearly 6% on weather forecasts that call for hotter weather to end the summer,
which would increase demand for the gas for air conditioner use.

The metals fell across the board as the dollar became more
attractive for investors. Gold fell 0.2%, silver fell 0.6% and copper fell
0.7% after a government report showed that Germany’s investor confidence was at
multi-year lows. Confidence in the dollar lowered demand for safe-haven

The grains were mostly lower. Corn was down 0.7%, wheat
was down 1.6%, soy was up fractionally and oats fell 0.7%.

The softs traded mixed today. Cocoa was down 1.5%,
coffee was up 1%, orange juice was down 2.2% and sugar was down 0.6%.

The meats were lower today, with cattle and porkbellies down


Chicago Fed President Says Further Interest Rate Hikes Could
Be Necessary (full

John Patrick Lee