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Dollar advances to 1-year high; Chinese yuan weakens

21 July 2018

United States gold futures for August delivery were down 0.8% at US$1,231.80 an ounce.

8% increase in rents, quarter-on-quarter and a 2.5% increase, year-on-year.

Electricity prices rose by 1.7%, quarter-on-quarter, and by 2.9% year-on-year.

The Australian dollar dipped 0.2 percent to $0.7405. At the time of writing, the Kiwi Dollar was down 0.78% to $0.6830. "The dollar is really reacting to this "goldilocks" effect of the economy and a slowly rising interest rate environment". The widening interest rate gap between the United States and other major markets has lifted the dollar and prompted analysts to expect further strengthening.

The Aussie Dollar moved from $0.74178 to $0.74147 upon release of the minutes, before moving to $0.7434, up 0.20% for the session.

The dollar pared the previous day's losses and gained 0.1 percent to 112.39 yen, crawling back towards a six-month peak of 112.80 touched last week. The region's shares were supported by currency weakness and a rally in tech stocks following well-received earnings updates, including from Sweden's Ericsson.

For the Euro, it's another quiet day for the Euro, with key stats scheduled for release being limited to finalized June inflation numbers out of Italy. Subsequently, the Indian rupee weakened against the USA dollar.

Copper on the London Metal Exchange was up 1.1 percent at $6,255 a tonne amid low stockpiles.

- Wage growth at last?

Against the dollar, the pound traded at $1.3077, after hitting a 10-month low of $1.3010 on Wednesday.

"Our policies reflect the strong performance of the economy and are meant to help make sure that this trend continues", Powell said in his prepared testimony.

"The stock markets have been quite steady recently, and this shows that investors are starting to look beyond the US midterm elections, which by then President (Donald) Trump's posturing is expected to have peaked out", said Monji of Daiwa SB Investments.

While Fed officials have supported Powell's two rate hikes this year with no dissents, one key policymaker, Neel Kashkari, the president of the Fed's Minneapolis regional bank, said in an essay Monday that he was growing concerned about the narrowing gap between short-term interest rates and long-term rates.

"There remain elements of caution, with export prices softening, trade tensions lingering and the domestic economy patchy, yet positioning remains the biggest near-term issue, which we suspect will see the kiwi biased to squeeze higher", ANZ Bank New Zealand economists Liz Kendall and Philip Borkin said in a note.

Dollar advances to 1-year high; Chinese yuan weakens