Forex - USD/JPY gains on New York factory data, eyes Fed meeting

The dollar rose against the yen on Monday after a New York state manufacturing gauge beat expectations.

The greenback saw safe-haven demand ahead of the Federal Reserve's two-day monetary policy meeting that begins Tuesday.

In U.S. trading on Monday, USD/JPY was trading at 94.95, up 0.82%, up from a session low of 94.12 and off a high of 95.13.

The pair was likely to find resistance at 95.81, Friday's high, and support at 93.80, Thursday's low.

The Federal Reserve Bank of New York's index of manufacturing conditions in the state came in better than expected in June, rising to a three-month high of 7.8 from -1.4 in May. 

Analysts were expecting the Empire State Manufacturing Index to come in at -0.5.

The numbers gave the dollar support in cautious trading.

A surprise decision by the Bank of Japan to leave policy unchanged last week after months of rolling out stimulus measures has sparked concerns that the days of ultra-loose policies in the U.S. may be ending.

Stimulus programs such as the Fed's USD85 billion bond-buying program weaken the greenback to spur recovery.

The yen, which surged against most other currencies in wake of the Bank of Japan's decision, fell on Monday amid profit taking, especially as U.S. stocks gained, which enticed investors out of the Japanese currency and into risk-on equity positions.

The yen, meanwhile, was down against the pound and down against the euro, with GBP/JPY up 1.01% and trading at 149.37 and EUR/JPYtrading up 0.99% at 126.91.

On Tuesday, the U.S. is to release official data on building permits, housing starts and consumer price inflation.

Meanwhile, finance ministers and central bankers from the G8 group of nations are to hold the second day of a summit in Northern Ireland.

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Forex - Dollar edges higher ahead of Federal Reserve meeting

The dollar traded largely higher against most major currencies on Monday as investors sought safety in the currency ahead of the Federal Reserve's two-day monetary policy meeting that begins Tuesday.

Talk the U.S. central bank may begin scaling back stimulus programs gave the greenback support, as such tools like the Fed's monthly USD85 billion bond-buying program weaken the currency to spur recovery.

In U.S. trading on Monday, EUR/USD was down 0.06% at 1.3336.

Uncertainty over the Federal Reserve's plans to scale back stimulus measures has fueled volatility in global markets in recent days.

A surprise decision by the Bank of Japan to leave policy unchanged last week after months of rolling out stimulus measures has sparked concerns that the days of ultra-loose policies in the U.S. may be ending.

On Monday, the Federal Reserve Bank of New York's index of manufacturing conditions in the state came in better than expected in June, rising to a three-month high of 7.8 from -1.4 in May. 

Analysts were expecting the Empire State Manufacturing Index to come in at -0.5, which convinced many investors that monetary easing measures may taper off soon.

Meanwhile the eurozone posted a smaller-than-forecast trade surplus of EUR16.1 billion in April. 

Exports fell by 0.8% from a month earlier, while imports rose 0.5%.

The greenback, meanwhile, was up against the pound, with GBP/USDtrading down 0.11% at 1.5688.

The dollar was up against the yen, with USD/JPY up 1.01% at 95.13, and up against the Swiss franc, with USD/CHF trading up 0.53% at 0.9256.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.20% at 1.0197, AUD/USD down 0.49% at 0.9526 and NZD/USD trading down 0.76% at 0.7982.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.21% at 80.99.

On Tuesday, the U.S. is to release official data on building permits, housing starts and consumer price inflation.

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Natural gas prices shoot up as weather forecasts point to rising temps

Natural gas prices shot up on Monday after weather forecasting models pointed to hotter temperatures settling in for much of the country.

In the New York Mercantile Exchange, natural gas futures for delivery in July traded at USD3.874 per million British thermal units, up 3.76%.

The commodity hit a session low of USD3.741 and a high of USD3.874.

The National Weather Service's six-to-ten-day outlook issued on Sunday called for above-normal readings for much of the U.S., with normal temperatures across the Great Plains and in the South.

Hotter temperatures send prices rising on sentiments that demand for natural gas will increase at the country's thermal power plants as businesses and households crank up their air conditioning.

Natural gas accounts for about a quarter of U.S. electricity generation.

Meanwhile, traders kept an eye out towards U.S. supply levels due for release on Thursday. 

Total U.S. natural gas storage stood 2.347 trillion cubic feet as of last week, 2% below the five-year average for this time of year. 

Early injection estimates for this week’s storage data range from 83 billion cubic feet to 95 billion cubic feet, compared to a 63 billion cubic feet increase during the same week a year earlier.

The five-year average for the week is a build of 80 billion cubic feet.

Elsewhere, a tropical depression formed in the Caribbean on Monday and was headed for landfall along the coast of Belize, though investors went long on natural gas on sentiments the system may emerge in the gas-rich Gulf of Mexico in the coming days.

Tropical weather systems often disrupt production in the Gulf of Mexico and send prices rising.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in August were up 0.31% and trading at USD98.38 a barrel, while heating oil futures for July delivery were up 0.06% at USD2.9638 per gallon.

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Gold remains lower after Empire State data; Fed meeting eyed

Gold futures edged mildly lower in rangebound trade during U.S. morning hours on Monday, as investors stuck to the sidelines ahead of the Federal Reserve’s upcoming policy meeting on Wednesday.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,383.85 a troy ounce during U.S. morning hours, down 0.3% on the day.

Comex gold prices held in a range between USD1,380.15 a troy ounce, the daily low and a session high of USD1,391.35 a troy ounce.

Gold futures were likely to find support at USD1,366.25 a troy ounce, the low from June 11 and near-term resistance at USD1,401.05, the high from May 28.

Gold prices remained lower after the Federal Reserve Bank of New York said that its general business conditions index rose to 7.8 in June from a reading of minus 1.4 in May.  

Analysts had expected the index to improve to minus 0.5 in June.

The Empire State index is of interest to traders primarily because it is seen as an early forecast of the national Institute for Supply management factory survey.

Meanwhile, investors remained cautious amid ongoing speculation over whether the Fed will begin to unwind its easing program in the coming months.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.

An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies. 

Elsewhere on the Comex, silver for July delivery fell 0.8% to trade at USD21.77 a troy ounce, while copper for July delivery shed 0.4% to trade at USD3.188 a pound.

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