IMF downgrades US growth forecast for 2017 and 2018

Uncertainty over President Trump’s administration policies has prompted the International Monetary Fund (IMF) to revise down its US growth outlook from 2.3% to 2.1% this year and to 2.1% from 2.5% in 2018. Sentiment towards the Dollar was already turning increasingly bearish amid the political drama in Washington, as well as concerns over low inflation weighing on US interest rate expectations and the fresh IMF downgrade bombshell is seen as a risk to pressuring prices further.

Investors will direct their attention towards the pending FOMC rate decision this week which markets widely expect to conclude with rates left unchanged. With no press conference scheduled after the meeting, market players will closely scrutinize the policy statement for additional clues on when the central bank plans to normalize its $4.5 trillion balance sheet. heavily on the currency.

Market players will direct their attention towards the preliminary second-quarter gross-domestic-product figures for the UK due to be released on Wednesday, which should offer further insight into the health of the nation as it tackles Brexit. A figure below the market consensus of 0.3% is likely to entice bears to attack the British Pound as Brexit concerns sour attraction towards the currency. the rising prospects of tighter global monetary policy still have a grip on the zero-yielding metal in the longer term, short term bulls are currently in control.

Technical traders may observe how Gold prices react to the $1260 resistance level this week. A break above $1260 should open a path higher towards $1268.