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USD Recovers On Strong US Data

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USD

On Thursday, the Greenback held near a two-week high against the yen and recovered vs. a basket of major currencies positively affected by a strong U.S. data, keeping alive the prospect of a U.S. interest rate increase before the end of the year.
In terms of data, the US revised second-quarter GDP increased at a 3.0% annual rate, its quickest pace in more than two years, the Commerce Department said. Meanwhile, U.S. businesses added 237K jobs in August, indicating the U.S. job market remains solid.
On the economic calendar for Thursday, the U.S. Personal Consumption Expenditure Core, which is measures the prices paid by consumers for goods and services without the volatility caused by movements in food and energy prices, is expected to decline to 1.4% from 1.5%.

  • The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose as much as +0.09% to settle at 92.96 pips on a strong U.S. data.

EUR

The common currency lost ground against its British and American counterparts as flash CPI reading weren’t as positive as predicted. The German preliminary CPI printed a minor 0.1% increase while the Spanish CPI came out lower than expected at 1.6%. On the tap, French preliminary CPI as well as German retail sales and unemployment change are due. Eurozone flash CPI are also due and this may determine the direction the common currency may take. The Euro Zone CPI released by the Eurostat captures the changes in the price of goods and services. The CPI is a significant way to measure changes in purchasing trends and inflation in the Eurozone. Generally, a high reading anticipates a bullish attitude which will be positive for the EUR, while a low reading is seen as negative (or bearish).

GBP

As jitters around Brexit eased, the British pound was one of the best performers yesterday. On the data front net lending to individuals printed a weaker result than predicted but mortgage approvals surpassed predictions. The Gfk consumer confidence index is due today and a decrease to -13 from -12 is expected. The speech by BOE MPC member Saunders is also due and may give fresh impetus to the pound.

JPY

The Japanese yen recaptured ground against its competitors after the retail sales data printed better than expected results. It unexpectedly rose to 1.9%, easily beating the expectations of 1.0%. On the economic calendar for Thursday, Preliminary Industrial Production, with the markets down by 0.4%. House starts data is also due and a 0.2% downtick is anticipated.

Gold

Earlier today, Gold prices edged down from their highest level in 11 months, on a strong U.S. data however, it managed to settle above the psychological of $1,300. Meanwhile markets are awaiting Friday’s Nonfarm payroll to measure the strength of the U.S. economy and how it will affect the Federal Reserve's plane on monetary policy. Gold Futures - Dec 17 fell as much as -0.13%, to settle at $1,312.44.

Oil

Despite Gasoline futures jumped to their highest level since July 2015, oil prices struggled near a five-week trough, as traders continued to measures Harvey’s impact on Supply and demand. Harvey, which could be the worst storm in US history in terms of financial damage, overshadowed the inventory data released by the US Energy Department, which showed oil stocks fell by 5.4 million barrels last week, far more than the expected decrease of 1.9 million barrels. Brent crude futures rose as much as +0.04%to settle at $50.74, while Crude Oil WTI rose as much as +0.28%, to settle at $46.09.

The most important economic events:

  • EUR German Unemployment Change (AUG): (GMT 07:55) – Important – Forecast (-6k) – Previous (-8k). 
  • EUR German Unemployment Rate s.a. (AUG): (GMT 07:55) – Important – Forecast (5.7%) – Previous (5.7%).
  • EUR Euro-Zone Consumer Price Index Estimate (YoY) (AUG): (GMT 09:00) – Important – Forecast (1.4%) – Previous (1.3%).
  • EUR Euro-Zone Consumer Price Index - Core (YoY) (AUG A): (GMT 09:00) – Important – Forecast (1.2%) – Previous (1.2%).
  • USD Personal Consumption Expenditure Core (YoY) (JUL): (GMT 12:30) – Important – Forecast (1.4%) – Previous (1.5%).

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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