America’s roundup: Dollar slips as trade war worries linger, Wall street rises, Gold steady, Oil gains more than 2 percent as stock market rebounds-april 10th, 2017
• China blames U.S for trade frictions, says negotiations currently impossible.
• U.S. budget deficit to balloon on Republican tax cuts-CBO.
• U.S. inflation expectations flat after gains -NY Fed.
• U.S. Mar Employment Trends, 107.7, 107.7 previous, 107.3 revised.
• Canadian firms see pickup in sales growth -central bank survey.
• ECB needs way of financing banks during wind-down – Constancio.
• Kuroda says BOJ eventually needs to consider how to normalise policy .
• “Russia in the doldrums?”: new U.S. sanctions to weigh on recovery.
• No new NAFTA deal this week, but 80 pct chance for early May -Mexico minister.
• Fed-up Mexico to review U.S. cooperation after Trump tensions .
• Analysts expect Mexico central bank to hold rates with inflation easing.
Looking Ahead – Economic Data (GMT)
• 9 Apr 22:00 New Zealand Q1 NZIER Confidence, -12% previous
• 9 Apr 22:00 New Zealand Q1 NZIER QSBO Capacity, 92.8% previous
• 10 Apr 01:30 Australia Mar NAB Business Conditions, 21 previous
• 10 Apr 01:30 Australia Mar NAB Business Confidence, 9 previous
Looking Ahead – Events, Other Releases (GMT)
• 10 Apr 07:00 Bank of Spain’s Luis M. Linde appears at financial crisis investigation committee in Parliament – Madrid
• 10 Apr 07:30 Keynote speech by ECB supervisory chief Daniele Nouy at an international conference on risk appetite framework in banks – Ljubljana, Slovenia
• 10 Apr 10:00 Norwegian finance ministry presents annual white paper about Norway’s $1-trillion sovereign wealth fund – Oslo
• 10 Apr 13:00 Governor of Norges Bank Oystein Olsen speaks to Foreign Embassy Representatives – Oslo
• 10 Apr N/A ECB policymaker Ewald Nowotny talks about the bank’s plans to end its 2.5 billion euro stimulus programme this year – London
EUR/USD is likely to find support at 1.2243 levels and currently trading at 1.2318 levels. The pair has made session high at 1.2328 and hit lows at 1.2260 levels. Euro strengthened on Monday as dollar dipped on persistent worries about a potential trade conflict between the United States and China and as the euro rose following comments from European Central Bank President Mario Draghi that were deemed supportive of the common currency. The dollar index, which measures the greenback against a basket of six other major currencies, was down 0.3 percent at 89.842, after slipping to low of 89.818, its weakest since March 28. Global markets took a hit last week as U.S. President Donald Trump upped the ante in a trade dispute with China, reviving investor jitters about the impact a tariff war could have on the world economy. Meanwhile, the euro, was up 0.32 percent against the greenback. A slide in stock markets this year has not materially impacted euro zone financial conditions, European Central Bank President Mario Draghi said on Monday, suggesting that policymakers remain calm about the recent market volatility. While Draghi’s comments were not materially a surprise, analysts said the move in the euro may have been exaggerated in a thin market which is expecting some more clarity on the trade war front when President Xi Jinping speaks at the Boao Forum for Asia in the southern province of Hainan on Tuesday.
GBP/USD is supported in the range of 1.4060 levels and currently trading at 1.4128 levels. It reached session high at 1.4162 and dropped to session low at 1.4120 levels. Sterling climbed against the dollar on Monday as sterling was boosted by data showing British house prices rose more than expected in March and after the greenback slipped to a six-day low. Economists expect the Bank of England to raise interest rates in May to help curb inflation, which has risen above target since Britain’s vote to leave the European Union in 2016 sent sterling plummeting. That assumption, along with a weak dollar and a transition deal Britain signed last month to cover a 21-month period after it leaves the bloc, have seen the pound claw back some of those losses. Sterling was on track for a third consecutive day of gains and changed hands as high as $1.4163, up half a percent. It was last trading at $1.4126 in the late US session. Earlier, data from mortgage lender Halifax showed UK home prices rose by a stronger-than-expected 2.7 percent in the first three months of 2018. Many investors are focusing on economic data to try to gauge whether Britain can stomach more than one rate hike in 2018.But some analysts say deep uncertainty surrounds Brexit negotiations and that could deter the BoE from tightening policy. Against the euro, the pound traded up 0.1 percent on Monday at 87.14 pence per euro after hitting a day’s high of 86.98 pence.
USD/CAD is supported at 1.2660 levels and is trading at 1.2704 levels. It has made session high at 1.2819 and lows at 1.2686 levels. The Canadian dollar strengthened against its U.S. counterpart on Monday following the release of a report by the Bank of Canada that said Canadian companies remain optimistic about sales growth despite trade uncertainties, reinforcing expectations of further interest rate hikes down the line. The first-quarter business survey showed, intentions to increase business investment were widespread, though slightly lower than previously, and firms on balance expected capacity pressures would intensify over the next year due to strong sales prospects and expected difficulties finding workers. While U.S. protectionism has delayed some investment, strong demand from south of the border is seen boosting sales, the central bank said in its closely watched survey that showed continued positive business sentiment after a strong 2017. Stocks and the price of oil, one of Canada’s major exports, recovered after officials of the Trump administration stressed the dispute with China could be resolved through talks. The Canadian dollar was last trading 0.58 percent higher at C$1.2707 to the greenback. The currency traded in a range of C$1.2686 to C$1.2818. It touched its strongest intraday on Friday in more than five weeks at C$1.2732.
AUD/USD is supported around 0.7640 levels and currently trading at 0.7696 levels. It hit session high at 0.7710 and made session lows at 0.7654 levels. The Australian dollar jumped higher against US dollar on Monday as investors tried to gauge whether a simmering tariff spat between the United States and China had the potential of exploding into a full-blown trade war. The Australian dollar was 0.2 percent firmer at $0.7698, within a $0.7643-$0.7727 trading band that has held since late March. Investors have been left to review a feast of news reports on trade after U.S. President Donald Trump threatened further tariffs on Chinese imports last Thursday. In response, Beijing warned it was fully prepared to retaliate with a fierce counter strike. But there were also seemingly positive headlines with U.S officials hoping the dispute could be resolved through talks and Trump predicting China would take down its trade barriers. There has been heightened volatility in global financial markets since Trump first slapped import tariffs on aluminium and steel products last month and later singled out China with extra duties. Trade barriers would prove negative for the open, export-heavy economies of Australia and New Zealand and their currencies, which are also liquid proxies for risk.
Further U.S. sanctions on Russian interests hit Europe-listed stocks on Monday, denting a recovery as investors became more hopeful a trade war between the United States and China could be averted.
UK’s benchmark FTSE 100 closed up by 0.1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.12percent, Germany’s Dax ended up by 0.1 percent, France’s CAC finished the day up by 0.04 percent.
Wall Street’s major indexes rose on Monday as a softer stance by U.S. policymakers on China tariffs powered a rebound from last week’s sell-off, though stocks pared gains in the final minutes of the trading session.
Dow Jones closed up by 0. 20 percent, S&P 500 ended up 0.35 percent, Nasdaq finished the day up by 0.51 percent.
U.S. benchmark Treasury yields rose on Monday, on pace to advance for the fourth session in five, as risk appetite rebounded after the United States eased concerns about a potential trade conflict with China.
U.S. 10-year yields rose to 2.800 percent, from 2.775 percent late on Friday. U.S. 30-year yields were also higher, at 3.040 percent, from Friday’s 3.017 percent. U.S. two-year yields climbed to 2.290 percent, up from 2.274 percent late Friday.
Gold prices rose on Monday as the U.S. dollar turned lower, but caution over the prospect of a potential escalation in the China-U.S. trade dispute, upcoming U.S. data and U.S. Federal Reserve meeting minutes kept prices in a range.
Spot gold gained 0.3 percent at $1,336.80 per ounce by 2:25 p.m. EDT (1825 GMT), while U.S. gold futures for June delivery settled up $4, or 0.3 percent, at $1,340.10 per ounce.
Oil prices rose more than 2 percent on Monday, supported by a rebound in the stock market as concerns of a trade war between the United States and China eased.
Brent crude futures rose $1.54 to settle at $68.65 a barrel. Brent prices gained 2.3 percent on the day, its largest daily percentage gain since March 21.
U.S. West Texas Intermediate (WTI) crude futures gained $1.36 to settle at $63.42, a 2.2 percent gain, its largest daily percentage rise since March 23.
Source: FXWire Media Round Ups