Morning Brief – Dollar rise continues

Markets action during the US session has been focused on the US dollar, with the greenback making strong gains against the euro, GBP, and Japanese yen.

The threat of intervention has been pushed back after Japan ruling party official Katayama said that “Japan lacks effective means to combat yen’s sharp fall.”

Markets had fearing intervention from the Bank of Japan, the latest comments from a higher-level official have caused the USDJPY pair to push back towards the 144.00 handle.

Katayama also said that “conducting solo FX intervention likely won’t be that effective in stemming sharp yen falls.” This goes against recent comments by other officials in Japan.

Elsewhere, big moves are being seen in the precious metals space today. Gold is close to a technical meltdown as it probes the lowest levels of the year so far. We are also seeing silver and copper under pressure.

Gold has little in the way of support if the price moves under the $1,680 level. Trades should be careful as a vacuum type of effect could take place, with stops being purged down to $1,650.

Today’s main event on the economic calendar is likely to be the release of the United States retail sales from the previous month. Expectations are for a 0.00 headline number.

Last month Retail sales in the US unexpectedly stalled in July of 2022, disappointing markets that expected a 0.1% increase as sales fell at gasoline stations and car dealers.

The report showed that sales at gasoline stations tumbled 1.8% as the gasoline price index dropped 7.7%. Declines were also seen for motor vehicle & parts dealers, clothing & clothing accessories stores, and at department stores.

Food and energy prices are going to be closely watched during this report. Last month sales at grocery stores increased by 0.2%, as food prices jumped 1.1%.

Excluding gasoline stations, sales rose 0.2%. Excluding automobiles, gasoline, building materials and food services, the so-called core retail sales rose 0.8.