• Dollar continues to rebound 
• Markets await strong evidence of US rate cuts

The US dollar rose on Thursday against a basket of major rivals on track for the second rise in a row away from 13-month lows amid active short-covering. 

The gains come ahead of important US growth and unemployment claims data, which could provide clues about the future of US rate cuts this year.

The Index

The dollar index rose 0.4% today to 101.36, with a session-low at 100.88.

The index closed up 0.5% on Wednesday, the second profit in three days away from 13-month lows at 100.51.

US Rates

According to the Fedwatch tool, the odds of a 0.25% Fed rate cut in September stood at 63%, and at 37% for a 0.5% rate cut.

Atlanta Fed President Raphael Bostic said the time has come to move with interest rate cuts as inflation declines and unemployment climbs, but he remained cautious. 

US Data

Later today, important US data on GDP growth for the second quarter and unemployment claims will be released, while tomorrow, personal spending data, the Fed’s favorite inflation gauge, is scheduled for release. 

US GDP is expected to have increased 2.8% in the second quarter, accelerating from 1.4% in the first quarter.

Unemployment claims are expected up slightly to 233 thousand in the week ending August 24 from 232 thousand in the previous reading.

• The precious metal approaches record highs once more
• Markets await strong evidence of US rate cuts

Gold prices rose in European trade on Thursday, resuming gains and approaching record highs as US 10-year treasury yields lost ground. 

The gains come ahead of important US growth and unemployment claims data, which could provide clues about the future of US rate cuts this year.

Prices

Gold prices rose 0.7% today to $2521 an ounce, with a session-low at $2503.

On Wednesday, gold lost 0.8%, the first loss in four days, moving away from record highs at $2531 an ounce on profit-taking.

US Yields 

US 10-year treasury yields fell 0.6% on Thursday, approaching multi-week lows and boosting non-yielding assets. 

Atlanta Fed President Raphael Bostic said the time has come to move with interest rate cuts as inflation declines and unemployment climbs, but he remained cautious. 

US Rates

According to the Fedwatch tool, the odds of a 0.25% Fed rate cut in September stood at 63%, and at 37% for a 0.5% rate cut.

Later today, important US data on GDP growth for the second quarter and unemployment claims will be released, while tomorrow, personal spending data, the Fed’s favorite inflation gauge, is scheduled for release. 

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday at 856.12 tonnes, the lowest since August 16. 

• New Zealand corporate confidence surges to 10-year high
• Low odds of additional New Zealand rate cuts this year

The New Zealand dollar rose in Asian trade on Thursday against a basket of major rivals, marking seven-month highs against the US dollar amid strong demand on the kiwi. 

Earlier data showed corporate sentiment in New Zealand surged to 10-year high, indicating economic flexibility and reducing the odds of additional RBNZ rate cuts this year.

The Price 

The NZD/USD rose 0.8% today to 0.6292, the highest since January, with a session-low at 0.6241.

The pair closed down 0.15% on Wednesday, the second loss in three days. 

Strong Demand

Investors are picking up the kiwi as the central bank maintained the second highest interest rates behind the US.  

And as the Federal Reserve prepares to cut interest rates in September, it’s likely that New Zealand rates will be the highest in the G8 soon.

Sentiment 

A survey by ANZ showed corporate sentiment in New Zealand surged in August to 10-year highs. 

Nearly 50.6% of responders expect the New Zealand economy to improve next year, up from 27.1% in the July survey.

New Zealand Rates

The odds of a 0.25% rate cut by the Reserve Bank of New Zealand at the October 9 meeting are still below 50%, as investors await more inflation and growth data later this quarter. 

The Australian dollar fell on Wednesday against most major rivals despite positive data. 

Earlier government data showed Australian consumer prices rose 3.5% y/y last month, above estimates of 3.4%. 

On trading, the AUD/USD pair fell 0.2% as of 20:32 GMT to 0.6782. 

Loonie

The Canadian dollar fell 0.2% against its US counterpart to 0.7420.

The US Dollar

The dollar index rose 0.5% as of 20:25 GMT to 101.1, with a session-high at 101.1, and a low at 100.5.

Now markets wait for US GDP growth data tomorrow, and personal spending data on Friday to gather more clues about the future of US interest rates.