America’s roundup: Dollar climbs as trade worries lift greenback, Gold drops, Wall street ends lower, Oil steady ahead of storm gordon; weighed by Dollar, cushing build-september 5th, 2018
• US Aug Markit Mfg PMI Final, 54.7, 54.5 previous.
• US Jul Construction Spending, 0.1%, -1.1% previous, 0.5% forecast, -0.8% revised.
• US Aug ISM Manufacturing PMI, 61.3, 58.1 previous, 57.7 forecast.
• CA Aug Markit Mfg PMI SA, 56.8, 56.9 previous.
• Trump backs Argentina’s Macri, encourages efforts with IMF.
• U.S. regulators extend comment period for proposed “Volcker Rule”.
• UK’s upbeat Brexit progress report given short shrift by parliament.
• Carney says he is ready to stay longer at Bank of England.
• Chaos descends as Senate hearing on Trump’s high court nominee opens.
• Erdogan has limited options to save Turkey from financial crisis.
Looking Ahead – Economic Data (GMT)
• 4 Sep 22:30 Australia Aug AIG Services Index, 53.6 previous
• 5 Sep 00:30 Japan Aug Services PMI, 51.3 previous
• 5 Sep 01:30 Australia Q2 Real GDP q/q SA, 1.0% previous, 0.7% forecast
• 5 Sep 01:30 Australia Q2 Real GDP y/y SA, 3.1% previous, 2.8% forecast
• 5 Sep 01:30 Australia Q2 Final Consumption Expenditure, 0.6% previous
• 5 Sep 01:30 Australia Q2 Gross Fixed Capital Expenditure, 0.5% previous
• 5 Sep 01:45 China Aug Caixin Services PMI, 52.8 previous
Looking Ahead – Events, Other Releases (GMT)
• N/A Federal Reserve Bank of New York President John Williams visits Buffalo and Niagara Falls, N.Y., to meet with leaders in business, community development, education and government, Buffalo, US.
• 07:00 Riksbank holds Executive Board meeting, monetary policy meeting no. 4 in Stockholm.
• 08:30 Speech by member of the ECB’s Executive Board Peter Praet at the Eurofi Financial Forum in Vienna.
• 13:20 St. Louis Fed President James Bullard makes a presentation on the U.S. economy and monetary policy at Real Return XII, Euromoney Conferences, New York, US.
• 14:00 Bank of Canada key policy interest rate announcement Ottawa.
• 20:00 Federal Reserve Bank of Minneapolis President Neel Kashkari participates in a townhall forum hosted by Montana State University Bozeman, Montana.
• 22:30 Federal Reserve Bank of Atlanta President Raphael Bostic speaks on the economic outlook and monetary policy before a fireside chat of the Chicago Council on Global Affairs Chicago, Illinois.
EUR/USD is likely to find support at 1.1500 levels and currently trading at 1.1577 levels. The pair has made session high at 1.1583 and hit lows at 1.1528 levels. The euro strengthened against dollar on Tuesday as U.S. dollar rose after investors looked for safety as they braced for an escalation in the U.S.-China trade conflict. Dollar was also boosted after data showed that U.S. manufacturing activity accelerated to a more than 14-year high. The Institute for Supply Management (ISM) said its index of national factory activity jumped to 61.3 last month, the best reading since May 2004 and up from 58.1 in July.The public comment period on a U.S. proposal for new tariffs on Chinese goods is set to end on Thursday. U.S. President Donald Trump can then follow through on plans to impose levies on $200 billion more of Chinese imports. U.S.-Canada trade talks ended on Friday with no deal to revamp the North American Free Trade Agreement (NAFTA) after Trump told Congress he would sign a bilateral trade pact with Mexico. The U.S. dollar index, which measures the greenback against a basket of major currencies, rose 0.34 percent, with the euro down 0.4 percent to $1.1576.
GBP/USD is supported in the range of 1.2796 levels and currently trading at 1.2854 levels. It reached session high at 1.2870 and dropped to session low at 1.2808 levels. Britain’s pound trimmed some losses against the dollar on Tuesday after Bank of England Governor Mark Carney said he was ready to stay in his job beyond his planned leaving date, but concerns over Brexit kept a lid on the British currency’s gains. Sterling’s recovery was further spurred by a news report the European Union could offer new guarantees to Britain to win London’s support for a solution aimed at avoiding an Irish border after Brexit. The pound has fallen recently amid weak economic data, doubts over Prime Minister Theresa May’s leadership and opposition from the European Union to Britain’s proposals for exiting the regional bloc. The currency edged off a one-week low against the dollar as Carney suggested to a parliamentary committee he was willing to remain on as BoE governor to help ease Britain’s economy through its departure from the European Union. The pound was down 0.12 percent against the dollar at $1.2844. Sterling fell to $1.2807 earlier in the session. Against a broadly weaker euro, sterling traded up 0.2 percent at 90.065 pence.
USD/CAD is supported at 1.3114 levels and is trading at 1.3177 levels. It has made session high at 1.3206 and lows at 1.3170 levels. The Canadian dollar weakened to a six-week low against its U.S. counterpart on Tuesday amid an uncertain outlook for Canada’s trading arrangement with the United States and ahead of an interest rate decision this week by the Bank of Canada. Canada and the United States ended talks to revamp the North American Free Trade Agreement (NAFTA) on Friday without reaching a deal. Canadian officials are due to resume talks with their U.S. counterparts on Wednesday. Canada sends about 75 percent of its exports to the United States, so its economy could be hurt if a deal is not reached. The Bank of Canada has worried that an uncertain trade outlook will hurt business investment. The central bank is expected to leave its policy rate unchanged at 1.50 percent on Wednesday. Oil prices were little changed as the market prepared for potential supply disruptions due to a hurricane forecast to hit the U.S. Gulf Coast, but gains were capped by the strong dollar and a report that Cushing, Oklahoma, stockpiles rose last week. The Canadian dollar was last trading 0.7 percent lower at C$1.3182 to the greenback. The currency touched its weakest since July 24 at C$1.3204.
USD/JPY is supported around 110.87 levels and currently trading at 111.46 levels. It peaked to hit session high at 111.51 and made session lows at 111.13 levels. The dollar gained against the Japanese yen on Tuesday as concerns about a possible escalation in the trade conflict between the United States and China boosted demand for the greenback. The dollar index, which measures the greenback against a basket of six currencies, was up 0.34 percent at 95.464. It rose to a two-week high of 95.737, earlier in the session. On the data front, U.S. manufacturing activity accelerated to more than a 14-year high in August, boosted by a surge in new orders, but increasing bottlenecks in the supply chain because of a robust economy and import tariffs could restrain further growth. The Institute for Supply Management (ISM) survey was at odds with another survey published on Tuesday that suggested a peak in manufacturing and pointed to a slowdown in the months ahead against the backdrop of a strong dollar. Recent surveys have also signaled a cooling in regional factory activity. U.S. jobs data for August on Friday is this week’s major economic focus and will be evaluated for further indications on the strength of the labor market and wage pressures. The jobs report is seen as unlikely to sway the Federal Reserve from raising interest rates this month for the third time this year. Futures traders are pricing in a 98 percent chance of a rate hike at the conclusion of the U.S. central bank’s Sept. 25-26 meeting.
European shares abandoned early gains and closed in negative territory on Tuesday, as investors grew increasingly worried that the United States would slap new tariffs on Chinese imports and get the trade war in full swing.
The UK’s benchmark FTSE 100 closed down 0.6 percent, FTSEurofirst 300 ended the day down by 0.75 percent, Germany’s Dax ended down by 1.1 percent, and France’s CAC finished the down by 1.3 percent.
U.S. stocks fell on Tuesday as trade concerns lingered and declines in Facebook and Nike shares weighed on Wall Street’s major indexes, though data showing U.S. manufacturing activity accelerated in August kept losses in check.
Dow Jones closed down by 0.04 percent, S&P 500 ended down 0.16 percent, Nasdaq finished the day down by 0.23 percent.
U.S. Treasury yields rose to three week highs on Tuesday after data showed that U.S. manufacturing activity accelerated to a more than 14-year high in August, and on heavy corporate debt supply.
Benchmark 10-year notes fell 14/32 in price to yield 2.902 percent, up from 2.853 percent on Friday. They earlier rose to 2.906 percent, the highest since Aug. 10.
The yield curve between two-year and 10-year notes steepened to 24 basis points, from 23 basis points.
Oil prices were little changed on Tuesday, as energy infrastructure on the U.S. Gulf Coast braced for a hurricane, but gains were capped as a stronger dollar and report of rising stockpiles at the Cushing, Oklahoma hub weighed.
U.S. West Texas Intermediate (WTI) crude futures rose 7 cents to settle at $69.87 a barrel after earlier hitting a session high of $71.40. U.S. markets were closed on Monday for Labor Day.
Brent crude, which traded on Monday, was ended 2 cents firmer to settle at $78.17 a barrel, down from a session high of $79.72.
Gold slipped on Tuesday as concerns over an escalating trade war between the United States and China battered emerging market currencies and prompted investors to seek perceived safety in the dollar.
Spot gold lost 0.6 percent at $1,193.78 an ounce by 1:33 p.m. EDT (1733 GMT), earlier sinking to $1,189.20, a 2-1/2-week low. U.S. gold futures for December delivery fell $7.50, or 0.6 percent, at $1,199.20 per ounce.
Source: FXWire Media Round Ups