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Dollar Rebounds from a Two-Week Low, Stocks Firmer

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Equities

Major US indices attempted to recover some of Monday’s losses to end the session on slight gains. The Sell-off that occurred on Monday due to the escalation of trade conflict between the United States and major economies attracted buyers. The Dow Jones Industrial Average found support near the 200-day simple moving average and ended the day on slight gains. SPX 500 gained six points to 2723. Global indices are vulnerable to any comments regarding the trade conflicts. Chinese President Xi warned provinces and ministries to prepare for “full-scale” trade war which pressured global indices in during the Asian session.

USD

The dollar index which measures the greenback against a basket of major currencies ended a three-day losing streak. DXY found support at a low of 94.17 and rose by 50 points to settle at 94.67. Moreover, the Dollar surged against the Japanese Yen to reach a high of 110.21 which is also the 200-day simple moving average. In terms of economic data, the durable goods figure for May is due today.

EUR

EUR/USD retreated from a two-week high of $1.1720 to end the day at $1.1646. The pair found heavy resistance near the 61.8 Fibonacci Retracement level of the drop from $1.1852 to $1.1508.

NZD

The New Zealand dollar extended sell-off against the United States dollar and reached a seven-month low of $0.6810 during the Asian session. NZD/USD depreciated more than three percent since early June as the latest economic reports from New Zealand reduced the chances of monetary policy tightening soon. The Reserve Bank of New Zealand interest rate decision is due today. The interest rate is still on hold at 1.75% since November 2016.

Metals

Gold prices drifted lower during the Asian session to reach fresh 2018 low of $1253. The gold bullion lost more than 3% of value in less than two weeks. The strong economic outlook of the United States which is supporting the strong rate guidance of the FED is weighing on the safe asset. The Silver ounce also depreciated to reach a two-month low of $16.12.

Oil

Oil prices surged on Tuesday on supply disruption and US-Iran conflict. West Texas Intermediate rose by 3.6% to close at $70.64, the highest level in a month. On the other hand, the Brent oil rose by 2.4% to settle at $76.62, the highest level in two weeks. The supply disruption from Libya and Canada is providing support to the oil prices. Moreover, the US administration asked its allies to have zero- imports of Iranian oil by November 4, or else they will face sanctions. The conflict between US-Iran and Trump pulling out from the Nuclear Deal provided support for the oil market in the past months. The American Petroleum Institute reported yesterday that the US crude oil weekly stock fell by 9.2 million barrels to a total of 421.4 million barrels last week. The official number from the Energy Information Administration is due today.   

Major Economic Events

GMT Country Event Expectation Previous
8:30 UK BoE Financial Stability Report     
8:30 UK BoE Gov Carney Speaks     
12:30 US Core Durable Goods Orders (MoM) (May) 0.5% 0.9%
14:00 US Pending Home Sales (MoM) (May) 1.1% -1.3%
14:30 US Crude Oil Inventories -2572 -5.914
21:00 NZ RBNZ Interest Rate Decision 1.75% 1.75%


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