Come to my page!

Category: Forex News, News

XAG/USD hovers around $29.50 after rebounding from three-week lows

  • Silver price rebounds from a three-week low of $29.11 recorded on Friday.
  • Non-yielding Silver struggled as the probability of a Fed rate cut in September decreased compared to the previous week.
  • Rabobank suggested that the Fed may cut rates in September and December, more likely because of a deteriorating economy.

Silver price recovers the previous session’s losses, trading around $29.50 per troy ounce during Monday’s Asian hours. The better-than-expected US employment data released on Friday has caused traders to delay their expectations of a Fed rate cut. This sentiment has put pressure on non-yielding assets like Silver.

According to the US Bureau of Labor Statistics (BLS), May’s US Nonfarm Payrolls (NFP) increased by 272,000, up from 165,000 in April. The stronger employment data has attracted buyers to the US Dollar (USD), which has dampened the demand for Silver by making the commodity more expensive for buyer countries using other currencies.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, continues to rise due to higher US Treasury yields. The DXY extends gains to near 105.20 with 2-year and 10-year yields on US Treasury bonds standing at 4.88% and 4.44%, respectively, at the time of writing.

A strong US jobs report could cause the Federal Reserve to keep higher rates for an extended period. According to the CME FedWatch Tool, the probability of a Fed rate cut of at least 25 basis points in September has decreased to nearly 48.0%, down from 54.8% a week ago.

However, Rabobank suggested in its report that the Fed may cut rates in September and December, more likely because of a deteriorating economy. This is because they think that the US economy is entering a stagflationary phase with persistent inflation and an economic slowdown that is likely to end in a mild recession later this year.

 


Source link
Come to my page!

Written by : Editorial team of BIPNs

Main team of content of bipns.com. Any type of content should be approved by us.

Share this article:

Leave A Comment