Dollar Strength Pressures Major Currencies and Commodities

A stronger US dollar set the tone across global markets on Monday, September 21, placing broad pressure on commodities and foreign currencies. Gold moved lower as a firmer dollar and profit taking pressured prices following a prior rebound. In energy markets, crude oil prices fell on hopes for diplomatic progress in the Middle East, easing some of the recent upward pressure on fuel prices.

Precious metals saw additional selling pressure after the regular session ended. By 10:30 am New York, overnight trading recorded gold -1.1% and silver -1.0%.

Major foreign currencies weakened against the dollar during the session as traders priced in higher odds of additional Federal Reserve interest rate increases following recent policy statements. That dollar strength weighed on European currencies and the Japanese yen, where trading was further influenced by holiday conditions and market scrutiny over potential official intervention. For the session on Monday, September 21, the board registered the euro -0.2% against the dollar, the pound -0.2% against the dollar, and the yen -0.2% against the dollar.

In digital assets, the session registered Bitcoin +0.8% and Ethereum +1.5% as inflows into exchange-traded funds and more than $648 million in short liquidations pushed prices higher.

Looking ahead, investors are tracking several scheduled political and macroeconomic events. The United Nations General Assembly and scheduled bilateral meetings in Washington are set to address trade policies and international relations. On the central bank calendar, the Central Bank of Nigeria holds its scheduled rate meeting on Tuesday, September 22. Later in the week, flash purchasing managers' index reports are scheduled to provide fresh readings on global economic activity.