Dollar Hits 4-Month High

Dollar Hits 4-Month High

On Tuesday, U.S. dollar surged to its highest level in more than four weeks vs. a basket of currencies, U.S. housing starts rose more than expected in June.

Housing starts increased by 4.8% to a seasonally adjusted annual pace of 1.19 million units, the Commerce Department said yesterday. The U.S. dollar index rose by 55 pips, the highest level since March and traded at 97.12.

Euro declined to its lowest level in ten days vs. USD and traded at $1.10, negatively affected by strong U.S. data. In addition, attention will turn to the European Central Bank, as it will make its first policy decision since the U.K.’s vote.

The single currency could decline further during the next period, if USD breaks the psychological level of $1.10.

Despite annual inflation in the UK accelerating better than expected in June, GBP failed to manage its gains and fell to $1.31. GBP could decline further to $1.30.
USD traded at ¥106 vs. JPY, the highest level since 24th June, and could re-test levels of ¥107 during the next period.

Gold settled at the resistance levels of $1,330, negatively affected by strong data of U.S. housing. From a technical point of view, the yellow metal could trade sideways at $1,335. 

Oil prices declined a little yesterday, as markets await the US inventory report. WTI settled down at $44.50. U.S. crude stockpiles could decline by 2.3 million barrels; therefore, prices may touch $45. 

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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