US Dollar Strength Lowers Prices of Oil and Gold

The dollar continued to strengthen on Monday, sending oil and gold prices lower, after the Group of Seven backed Japan’s efforts to spur growth via aggressive monetary easing.

An unexpected rise in U.S. retail sales in April as households bought cars, home improvement materials and a range of other goods, also underpinned the dollar as it pointed to underlying strength in the world’s biggest economy.

Wall Street, however, was expected to see some mild profit taking on opening following a stellar run to record highs.

The dollar, which has risen 5 percent against a basket of major currencies since February, and double that versus the yen, looked unlikely to buckle after officials at a G7 meeting in Britain over the weekend showed little concern about the yen’s slump.

It hit a new 4-1/2 year high of 102.15 yen in Asian trading and was on the front foot again at 102.96 yen and $1.2953 against the euro following the U.S. retail sales numbers.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza