The dollar recovered on Tuesday and early Wednesday trading as global trade war worries are on the rise again. The Dollar index, DXY, that measures the greenback versus a basket of major currencies rose more than 0.5% yesterday after posting a low of 88.94. US stocks dropped with SPX500 and NASDAQ erasing all Monday’s gains. Technology sector suffered especially after news that the Trump administration considers blocking Chinese investments in certain technologies. As for today, we await the fourth quarter GDP, it is expected to rise to 2.7% up from 2.5%.
EURUSD is back below 1.24 after posting a high of 1.2477 in early trading yesterday. The euro got affected with the soft economic data such as the drop in Spanish CPI and German import Price Index.
The Pound fell yesterday to lowest level in a week, posting a low of 1.4066, triggering heavy demand that succeeded in moving the pair back up to close above 1.4150. Fundamentally, the pound is still supported with the secured Brexit transition deal with the European Union, the growth in the wages, and the Hawkish tone of the Bank of England.
Gold prices retreated yesterday to post the lowest percentage drop in two weeks. Gold traded at a low of $1340 after posting a high of $1357. Gold prices will be able to find support as long as trade war worries mount.
Oil prices fell for the second day affected by a strong US dollar and a rise in the U.S Inventories. Brent traded back below 70$ per Barrel and U.S West Texas Intermediate Crude dipped below $65. The American Petroleum Institute reported on Tuesday a surprise 5.3 million barrels rise in Crude stock. The official data from the Energy Information Administration is due today where economists expects a drop of 287K barrels in inventories.
The most important economic events:
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