The dollar index rose almost 1% yesterday, after economic data from United States showed improvements. The DXY traded at a low of 89.25 in early trading, to bounce back and post a high of 90.15 which is the highest since FOMC interest rate decision last week. The better than expected GDP numbers of fourth quarter confirmed the solidity of the US economy, which boosted the dollar. As for today, market awaits PCE and Jobless claims. US equities ended the session near opening levels, showing uncertainty in the market, waiting for new developments in the trade talks.
The Euro weakened due to the strength of the dollar and ECB officials suggesting that the ECB is not in a hurry to tighten its monetary policy. EURUSD found support at 1.23, dropping from a high of 1.2414. In terms of data, we are waiting for the employment and CPI numbers from Germany. The pair is now retracing some of its losses and trading at 1.2330.
The British Pound dropped yesterday against the U.S dollar continuing the downward movements seen on Tuesday. The CBI Retails sales survey showed sales volumes softening in recent months, with a reading of -8. Today, the market is waiting for the growth numbers of fourth quarter, will these numbers be able to support the pound and avoid a drop to 1.40? GBPUSD is now trading 1.4050, the lowest in a week.
Gold suffered on Wednesday, posting the biggest one-day loss since February. Gold dropped to the lowest level in a week, trading at $1325, after economic data from United States showed strength in the U.S economy.
Oil prices traded at lows of $63.80 yesterday, after inventory report from the Energy Information Administration showed a rise of 1.643 million. Oil erased all the losses that occurred after the report. Prices remain support by the fact that OPEC and other suppliers will stick to the output cut strategy for the rest of the year.
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