Early price action in Asia has the U.S. dollar higher by 0.2% slightly higher above the 114 level against the yen. The greenback is still riding some of the momentum from Friday’s strong nonfarm payroll report. On Friday, the June nonfarm payroll came in at 222,000, well above the 178,000 estimate. The May report was also revised higher. With most signs continuing to point to a stronger US economy, the case for policy normalization will be easier for Fed Chair Yellen. Yellen will deliver her semiannual testimony to Congress on Wednesday.
Gold prices started the trading week slightly higher following last’s week slide that took price below the 200-day SMA. On Friday, the Fed released their Semi-Annual Monetary Policy Report. The central bank told Congress that the US economy will strengthen and that further rate hikes are on the way. The Fed also noted that financial system vulnerabilities remained modest and that the economy grew at a moderate pace over the first half of the year.
Oil prices rose 0.5% on early on Monday, supported by the first fall in US drilling activity since January, despite rising output from OPEC despite a pledge to cut supplies capped gains. Since hitting a 10-month low, prices have rebounded sharply.