Gold Pulls Back on US Inflation Data

Gold prices retreated from a three-month high to around $4,610 after the latest US Personal Consumption Expenditures (PCE) inflation data came in largely as expected. The figures renewed market expectations for a potential Federal Reserve interest rate hike, which cooled overall market sentiment and put pressure on the non-yielding precious metal.

US Dollar Strengthens on Hawkish Fed Outlook

The US Dollar saw broad-based strength ahead of the Jackson Hole Symposium, gaining against currencies like the Mexican Peso and the British Pound. This move was fueled by traders increasing bets on hawkish Federal Reserve policy following the latest US inflation report. While the dollar's firmness capped gains for currencies like the New Zealand Dollar, the Australian Dollar showed resilience due to expectations of rate hikes from its own central bank.

Japanese Yen Weakness Prompts Corporate Action

The Japanese Yen continued to show weakness, slipping against the US Dollar and prompting Japanese corporations to look for new ways to hedge against a prolonged period of depreciation. The Yen also lost ground against the British Pound, reflecting a broader trend of softness that is becoming a long-term consideration for Japanese businesses.

Iran and Oman Reach Strait of Hormuz Agreement

In a significant geopolitical development, Iran and Oman have reportedly reached a revenue-sharing agreement concerning the Strait of Hormuz. The deal was announced amid ongoing tensions between Tehran and Washington over control of the critical waterway, a key chokepoint for global trade and energy transport.