The New Zealand dollar fell against most major currencies during Monday trading despite positive economic data.

Government data showed that New Zealand’s retail sales index rose by 0.5% in the second quarter, while analysts had expected a 0.1% increase.

Excluding volatile items such as energy and food, New Zealand’s core retail sales index rose by 0.7% in the second quarter, compared with expectations of a 0.3% decline.

As for trading, the New Zealand dollar fell against its US counterpart by 0.4% to 0.5848 as of 20:14 GMT.

Australian Dollar

The Australian dollar fell against its US counterpart by 0.2% to 0.648 as of 20:14 GMT.

US Dollar

The dollar index rose by 0.7% to 98.4 points as of 19:51 GMT, recording a high of 98.4 and a low of 97.7.

This came after remarks by Federal Reserve Chairman Jerome Powell at the Jackson Hole conference on Friday, where he hinted at an upcoming rate cut.

According to the CME FedWatch tool, markets are pricing in over an 86% chance that the Fed will cut rates by 25 basis points at the September meeting.

Later this week, Nvidia will report earnings after Wednesday’s close, followed by results from Dell and Marvell Technology.

Also due on Friday are US Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge.

Gold prices held steady with a negative bias during Monday trading as the dollar rose against most major currencies and markets assessed Federal Reserve policy expectations.

This followed remarks by Fed Chairman Jerome Powell at the Jackson Hole conference on Friday, where he hinted at an upcoming rate cut.

According to the CME FedWatch tool, markets are pricing in over an 86% chance that the Fed will cut rates by 25 basis points at the September meeting.

Later this week, Nvidia will release earnings after Wednesday’s close, followed by results from Dell and Marvell Technology.

Also due on Friday are US Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge.

Meanwhile, the dollar index rose by 0.7% to 98.4 points as of 19:51 GMT, with a high of 98.4 and a low of 97.7.

As for trading, spot gold fell by less than 0.1% to 3,415.4 dollars an ounce as of 19:52 GMT.

The United States’ decision last week to exempt refined copper from import tariffs contrasted with its earlier move to impose steep duties on aluminum, highlighting the central role of electricity costs and the dynamics of lobbying pressure in shaping US policy.

Washington surprised the copper market by imposing taxes only on imports of semi-finished products such as wires, tubes, and sheets, while leaving refined metal untouched. Since the announcement last Wednesday, copper prices on Comex have fallen by more than 20%.

In contrast, refined aluminum shipped to the United States since June has faced a 50% tariff, as domestic producers contend with higher electricity costs compared to copper producers.

Tariffs on metal production fall under broader US efforts to revive domestic smelting capacity and reduce reliance on imports.

Century Aluminum was among the strongest advocates of these duties, arguing they are essential to protect what remains of America’s aluminum smelting industry. The company said in a June statement: “Century Aluminum applauds President Trump’s steadfast defense of domestic production of critical metals through raising aluminum tariffs to 50%.”

The exemption of refined copper, however, reflects its importance to US industry and the influence of the copper sector, including Freeport-McMoRan, which warned earlier this year that a global trade war could damage US copper production.

The company told the US government in a memo: “A global trade war could lead to slower economic growth... slower growth in the United States or globally would negatively impact copper prices, which could threaten the sustainability of the domestic copper industry due to its high cost structure.”

For aluminum, the main argument in favor of US tariffs relates to the share of energy in smelting costs. Macquarie estimates that energy represents about 50% of the cost of producing primary aluminum, compared with 30% for copper.

Macquarie analyst Marcus Garvey said: “There is no economic justification for building any new aluminum smelting capacity without significant intervention. Even with intervention, it may not be enough.”

Analysts note that one of the biggest challenges for potential investors in US aluminum smelting is the difficulty of securing long-term power purchase contracts at competitive rates, especially given higher energy costs in the United States compared to producing countries such as the UAE, Bahrain, and the world’s largest producer, China.

High electricity costs are the main reason the number of active smelters in the United States has fallen to just four today, compared with 23 in 1995.

According to US Geological Survey (USGS) data, US primary aluminum production totaled 3.35 million metric tons in 1995, fell to 1.6 million tons in 2015, and declined further to just 670,000 tons last year.

Most US stock indexes fell at the start of Monday trading amid profit-taking by investors following last week’s strong gains on Wall Street.

This came after remarks by Federal Reserve Chairman Jerome Powell at the Jackson Hole conference on Friday, where he hinted at an upcoming rate cut, with estimates showing a probability of over 90% for a cut at the September meeting.

Later this week, Nvidia will report earnings after Wednesday’s close, followed by results from Dell and Marvell Technology.

Also due on Friday are US Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge.

As for trading, the Dow Jones Industrial Average fell by 0.5% (equivalent to 216 points) to 45,420 points as of 17:50 GMT, while the broader S&P 500 declined by 0.1% (equivalent to 9 points) to 6,457 points. In contrast, the Nasdaq Composite rose by 0.2% (equivalent to 36 points) to 21,533 points.