On Tuesday, the Greenback fell slightly on comments from St. Louis Fed President James Bullard and Minneapolis Fed President Neel Kashkari, but it managed to maintain most of the gains it made following last Friday’s strong employment data. This kept hope alive that the Federal Reserve could hike interest rates before the end of the year. In addition, traders are awaiting for evidence as to when the Fed will begin cutting its $4.2 trillion bond portfolio.
The single currency traded under pressure yesterday vs. a basket of major currencies as German industrial production unexpectedly declined in June for the first time this year, as construction and manufacturing caused a temporary blow in the growth spurt of Europe’s largest economy. The figure came in a 1.1% fall versus an expected 0.2% increase. EUR/USD settled at $1.1807. On the data front, the German and French trade balances are due. Better than expected results could drive the common currency higher.
The British currency continued on the back foot with traders adjusting their positions on Brexit concerns and a hawkish Bank of England bias. Yesterday, the Halifax HPI came out better than expected at 0.4% vs 0.3%. No reports are due from the British economy today.
The Japanese yen recaptured some of lost ground verses it’s competitors as tensions in North Korea drove investor demand for safe heavens. On the data front, the country’s leading indicators improved to 106.3% from 104.06% with the country’s current account surplus also increasing to 1.52trillion yen from 1.40trillion yen. On the tap, we have the economy watchers sentiment index due.
Earlier today, Gold prices rose slightly as the Greenback fell slightly, with traders are awaiting for US inflation figures later this week for clues on the pace of monetary tightening by the Federal Reserve. U.S. gold futures for December delivery rose 0.11% to $1,266.03, while Spot gold rose as much as 0.2%, to $1,259.43.
Oil prices drifted down as production from Libya’s largest oil field has returned to normal after a brief disruption. According to the latest Reuters survey, Libya produced 1.03 million barrels a day during last month. Meanwhile, markets await the outcome of the two-day OPEC’s meeting in Abu Dhabi, which is due to end today.
Brent crude futures fell as much as 0.4% or 23 cents, to settle at $52.14 a barrel after declining to 0.1% in the previous session, while crude oil WTI (Sep '17) were down by 0.20%, to settle at $49.29.
On release front, the American Petroleum Institute (API), which is the largest U.S. trade association for the oil and natural gas industry, will release its own report on stockpiles and refinery throughput.
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