More optimistic signals U.S. economy

More optimistic signals U.S. economy

USD was noted soaring against other major currencies during last week trading session following the positive data of U.S. economy, it strengthens reviews of the world's biggest economy of steady growth in the second quarter. In July 15th session end, Dollar Index measuring the strength of greenback versus a basket of currencies rose 0.7 percent to 96.60 points.

Report of the US Department of Commerce published Friday said U.S. retail sales in June rose 0.6%, 2016, significantly higher than 0.1% anticipated by analysts and recorded the third consecutive increase. Other statistic showed that U.S. industrial output rose 0.6% in June, recorded the strongest increase in 11 months. Besides, the consumer price index (CPI) in June rose 0.2%, same as the increase in May, this showed inflation tends to go up.

The positive statistics of U.S. economy boost investor back to the expectation that Fed will increase interest rates in the remaining months of this year. However, analysts believe that Fed will continue expressing caution at the meeting on June 26-27th. The Agency will await the evaluation of the impact of UK leaving the European Union (EU) for the prospects of the U.S. economy before giving the signal to adjust policy interest rates.

The coup in Turkey on Friday evening July 15th has created momentum for gold prices to go up in last week session. However, demand for haven assets diminished after the coup ended in defeat to push gold prices falling back in the first session of this week. Analysts suppose that the gold price this week will likely continue under pressure by the upward uptrend of USD.

Notable economic information this week is the PMI index of the euro area and the results of the meeting of the European Central Bank (ECB). Analysts predicted the ECB would not make any policy changes would in this session. However, ECB Chairman Mario Draghi will open the possibility for economic stimulus in the coming period if the Eurozone economic prospects deteriorate due to the influence of Brexit.

Though British pound fell during the session Friday but it had a recovery from the 31-year low after the Bank of England (BoE) kept interest rates at 0.5%, against forecasts of interest rate cuts. Employment data and retail sales of June announced this week as prediction will put pressure to GBP to drop again.

GOLD: SELL 1338; TARGET: 1322; STOP-LOSS: 1346

Thong Le

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