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The Greenback Declines on Worries over U.S. Policy

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USD

On Friday, the Greenback pared its earlier gains, trading under pressure vs. its counterparts. It declined against the Japanese yen, amid growing concerns over Trump's ability to implement economic policies, such as tax cuts and infrastructure spending. The fallout from Trump’s response to Charolottesville also compounded the currency’s stance.

On the release front, manufacturing activity in the Philadelphia-area grew at a notably slower rate in the month of August; fell to 18.9 in August from 19.5 in July.

The economic calendar for Friday has the University of Michigan consumer confidence, which is expected to jump to 94 from 93.4 of the previous reading. 

  • The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell as much as 0.06%, to settle at 93.54 pips.

EUR

The single currency fell to a three-week low yesterday, negatively affected by minutes of the ECB's latest policy meeting as minutes showed that the ECB’s policymakers are still concerned that inflation in the 19-nation Eurozone is extremely low despite the improvement of the economy. To add to this, the terror attack in Spain weighed on risk-appetite and investor sentiment. On the data front, the final CPI readings were unchanged at 1.3% for the headline and 1.2% for the core.

EUR/USD recovered on Friday morning by 0.04%, to settle at $ 1.1728.

GBP

The sterling pound recommenced its fall verses it’s contemporaries in spite of the UK reporting stronger than anticipated retail sales figures. Consumer spending increased to 0.3% against the predicted 0.2% uptick. No reports are due from the British economy today.

JPY

The Japanese yen was able to strengthen on the back of Bank of Japan’s trimming and the decrease in risk-taking. Japan’s trade balance also saw an uptick with a stronger than predicted surplus of 0.34 trillion yen. CPI reading are on the tap today. A stronger data print could strengthen predictions of another decrease in purchases of bonds by the BOJ. 

Gold

Gold prices were steady on Friday, as some traders shifting towards safe-haven assets amid political uncertainty in the United States and after the Barcelona attack. Spot gold settled at $1,287.34, while gold futures for December delivery rose as much as 0.48%, to settle at 1,298.58.

Oil

Earlier today, Oil prices declined negatively affected by selloff across markets and despite signs that crude oil markets are gradually narrowing. The fall in oil prices happened amid wide selling-off across the global markets, such as Asian stocks and the U.S., where traders voted with their feet amid fresh doubts over Trump agenda.

U.S. West Texas Intermediate (WTI) crude futures (CLc1) fell as much 0.08%, to settle at $47.05 a barrel, while Brent Oil was down by -0.04%, to settle at $51.01.

The most important economic events:

  • CAD Consumer Price Index (YoY) (JUL): (GMT 12:30) – Important – Forecast (1.2%) – Previous (1.0%).
  • USD U. of Michigan Confidence (AUG P): (GMT 14:00) – Important – Forecast (94) – Previous (93.4%).
  • USD Baker Hughes U.S. Rig Count (AUG 18): (GMT 17:00) – Important – Forecast (N/A) – Previous (949).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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