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  1. Gold prices tumbled on Tuesday, extending losses to a third successive session, as the dollar strengthened against most major currencies after Federal Reserve Chair Jerome Powell's testimony before the Senate Banking Committee.

    Gold futures for August delivery ended down $12.40 or 1% at $1,227.30 an ounce, the lowest close since 14 July 2017.

    Powell, in his testimony before Congress maintained an upbeat outlook for the U.S. economy and this very clearly suggests the Fed will continue to raise interest rates.

    Describing recent inflation data that showed consumer inflation a little above the central bank's 2% target, as "encouraging," Powell said that the policymakers are of the view that the best way forward is to keep hiking rates gradually to keep inflation around its target.

    The fed chair said the U.S. economy has grown at a solid pace so far this year and noted the latest data suggests economic growth in the second quarter was "considerably stronger" than in the first quarter.

    The greenback gained in strength after the testimony, and the yellow metal, which was fairly steady till then, lost ground and kept sliding as the session progressed to eventually settle at its lowest price in a year.

    The dollar index was up 0.41 or 0.43% at 94.68, coming off a low of 94.04.

    Meanwhile, silver futures for September were down $0.177 or 1.12% at $15.635 an ounce and Copper futures were lower by $0.015 or 0.52% at $2.750 per pound.


    The material has been provided by InstaForex Company - www.instaforex.com
  2. Federal Reserve Chairman Jerome Powell reiterated during testimony on Capitol Hill on Tuesday that the central bank believes gradually raising interest rates is the "best way forward."

    Appearing before the Senate Banking Committee, Powell offered an upbeat assessment of the state of the U.S. economy.

    Powell said the U.S. economy has grown at a solid pace so far this year and noted the latest data suggests economic growth in the second quarter was "considerably stronger" than in the first quarter.

    The Fed chief also described recent inflation data as "encouraging," with consumer price inflation a little above the central bank's 2 percent target.

    "Looking ahead, my colleagues on the FOMC and I expect that, with appropriate monetary policy, the job market will remain strong and inflation will stay near 2 percent over the next several years," Powell said.

    With the strong job market, inflation close to the objective, and the risks to the outlook roughly balanced, Powell said the Fed believes gradually raising interest rates is "the best way forward."

    "We are aware that, on the one hand, raising interest rates too slowly may lead to high inflation or financial market excesses," Powell said.

    He added, "On the other hand, if we raise rates too rapidly, the economy could weaken and inflation could run persistently below our objective."

    Powell said the Fed will continue to weigh a wide range of relevant information and stressed that the central bank's policy decisions will depend on the economic outlook.

    The Fed has raised rates twice this year to the current range of 1.75 to 2 percent and has signaled two more rate hikes before the end of the year.

    "The upbeat tone of Fed Chair Jerome Powell's semi-annual testimony to Congress suggests that uncertainty over trade policy will not prevent the Fed from continuing to raise interest rates," said Andrew Hunter, U.S. Economist at Capital Economics.

    He added, "Although trade tensions remain a downside risk, we continue to expect strong activity growth and rising inflation to prompt the Fed to raise interest rates in September and December this year and twice more in early 2019."

    Powell did not say much in his prepared remarks about the recent trade disputes between the U.S. and key trading partners other than to say the ultimate outcome of current discussions over trade policy is "difficult to predict."


    The material has been provided by InstaForex Company - www.instaforex.com
  3. The U.S. dollar continued to be higher against its major counterparts in the New York session on Tuesday, after Fed Chairman Jerome Powell remarked that the central bank would continue raising rate gradually amid solid economic expansion.

    In his semi-annual testimony, Powell struck a positive note on economy, indicating that he expects the job market to remain strong and inflation to stay near 2 percent over the next several years.

    He said that the risk of unexpected weakening of economy is roughly balanced, with the possibility of the economy growing faster than currently expected.

    "With a strong job market, inflation close to our objective, and the risks to the outlook roughly balanced, the FOMC believes that--for now--the best way forward is to keep gradually raising the federal funds rate."

    Data from the National Association of Home Builders showed that homebuilder confidence in the U.S. has held steady in the month of July.

    The report said the NAHB/Wells Fargo Housing Market Index remained unchanged in July after dipping to 68 in June. The unchanged reading matched economist estimates.

    Data from the Federal Reserve showed that U.S. industrial production increased in line with economist estimates in June, partly reflecting a rebound in auto production.

    The Fed said industrial production climbed by 0.6 percent in June after falling by a downwardly revised 0.5 percent in May.

    The currency has been trading in a positive territory against its major rivals in the European session.

    The greenback advanced to 1.1685 against the euro, after falling to a 6-day low of 1.1745 at 5:00 am ET. The greenback is seen finding resistance around the 1.15 level.

    The greenback remained firm at a 4-day high of 1.3145 against the pound, following a decline to 1.3269 at 4:45 am ET. The greenback is likely to find resistance around the 1.30 level.

    Figures from the Office for National Statistics showed that Britain's employment level set a fresh record in the three months to May and unemployment was unchanged, yet pay growth eased to its lowest in six months.

    The number of employment was a record high 32.399 million in the March to May period, rising by 137,000 from the previous three months. Economists had forecast employment growth of 115,000.

    Having fallen to a 6-day low of 0.9927 against the Swiss franc at 4:45 am ET, the greenback reversed direction and bounced off to 0.9967. The next possible resistance for the greenback is seen around the 1.01 level.

    The greenback climbed to a 4-day high of 112.79 against the yen, from a low of 112.23 seen at 5:00 pm ET. If the greenback continues its rise, 114.00 is possibly seen as its next resistance level.

    The greenback strengthened to 4-day highs of 1.3189 against the loonie and 0.7386 against the aussie, from its early lows of 1.3111 and 0.7438, respectively. On the upside, 1.34 and 0.72 are likely seen as the next resistance levels for the greenback against the loonie and the aussie, respectively.

    Reversing from an early weekly low of 0.6841 against the kiwi, the greenback rose back to 0.6784. This may be compared to a 4-day high of 0.6756 set in the early Asian session. Continuation of the greenback's uptrend may see it challenging resistance around the 0.66 level.


    The material has been provided by InstaForex Company - www.instaforex.com
  4. Homebuilder confidence in the U.S. has held steady in the month of July, according to a report released by the National Association of Home Builders on Tuesday.

    The report said the NAHB/Wells Fargo Housing Market Index remained unchanged in July after dipping to 68 in June. The unchanged reading matched economist estimates.

    "Consumer demand for single-family homes is holding strong this summer, buoyed by steady job growth, income gains and low unemployment in many parts of the country," said NAHB Chairman Randy Noel.

    The NAHB said the index measuring current sales conditions also remained unchanged from the previous month at 74 in July.

    Meanwhile, a two-point drop by the index gauging expectations in the next six months was offset by a two-point increase by the index charting buyer traffic.

    "Builders are encouraged by growing housing demand, but they continue to be burdened by rising construction material costs," said NAHB Chief Economist Robert Dietz.

    He added, "Builders need to manage these cost increases as they strive to provide competitively priced homes, especially as more first-time home buyers enter the housing market."

    On Wednesday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of June.

    Housing starts are expected to edge down to an annual rate of 1.320 million in June after jumping to a rate of 1.350 million in May.


    The material has been provided by InstaForex Company - www.instaforex.com
  5. Fed Chairman Powell Begins Testimony Before Senate Banking Committee


    The material has been provided by InstaForex Company - www.instaforex.com