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Dollar Declines with Investors Remaining Cautious

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USD

On Tuesday, the Greenback fell vs. a basket of major currencies, as investors remained cautious following North Korea's latest provocation amid signs that may conduct more missile tests.

On the economic calendar for Tuesday, markets are awaiting the U.S. Factory Orders, which are expected to fall to -3.3% from 3.0%.  

In terms of the U.S. debt limit, only its Congress can hike it; however, anticipations state that the ceiling would not affect the Federal Reserve efforts to clean up after Hurricane Harvey.

  • The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies rose as much as 0.20% to settle at 92.655 pips.

GBP

The Sterling pound fell yesterday, negatively affected by weaker than expected data as the British new car sales declined between 6% and 7% year-on-year in August.

 In addition, the UK construction sector activity unexpectedly declined in August, touching a one-year low and dampening hopes over the British economy. UK construction purchasing managers' index edged down to a seasonally adjusted 51.1 in August from July’s reading of 51.9. GBP/USD fell as much as 0.05%, to settle at $ 1.2923.

JPY

The Greenback fell as much as 0.29% vs. the JPY at 109.39 as global tensions simmered.

EUR

The common currency decline as much as 0.13%, to settle at $1.1881.

Gold

Earlier today, Gold prices edged higher reaching its highest rank in about a year, as safe-haven demand for gold remained strong in the wake of North Korea's most powerful nuclear test to date. The recent tensions have prompted traders to leave assets seen as riskier, such as stocks and high yielding currencies, and shift to traditional safe-haven assets like the yen and Gold.  Gold futures rose as much as 0.64% to settle at $1,338.93, after hitting its highest level since September 2016 at $1,345.50 earlier.

Oil

Gasoline prices fell and U.S. crude prices traded mixed yesterday as some refineries returned to operate again following Hurricane Harvey. U.S. markets were closed yesterday due to a national holiday and trading remained quiet. Brent Oil fell as much as -0.11%, to settle at $52.28, while Crude Oil WTI rose as much as +0.63%, to settle at 47.59.

The most important economic events:

  • GBP Markit/CIPS UK Construction PMI (AUG): (GMT 08:30) – Medium – Forecast (52) – Previous (51.9).
  • EUR Euro-Zone Producer Price Index (MoM) (JUL): (GMT 09:00) – Medium – Forecast (0.1%) – Previous (-0.1%).

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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