America’s roundup: Dollar weaker as soft-brexit hopes boost Pound, Euro, Gold climbs higher, NASDAQ ends down more than 1 pct, Oil falls more than 1 pct as storm fears ease, demand concerns mount-september 6th,2018
Argentine peso rises as government seeks new IMF deal.
Fed’s Bullard makes case again for halting interest rate rises.
NAFTA talks to resume in afternoon after Canada cites ‘goodwill’.
US Jul International Trade $, -50.1B, -46.3B previous, -50.3B forecast, -45.7B revised.
US Jul Goods Trade Balance (R), -72.05B, -72.20B previous.
US 31 Aug w/e MBA Mortgage Applications Survey Composite Index, -0.1%, -1.7% previous.
US 1 Sep w/e Redbook y/y, 6.5%, 5.1% previous.
US 1 Sep w/e Redbook m/m, 0.8%, 0.4% previous.
CA 5 Sep BOC Rate Decision, 1.50%, 1.50% prev,1.50% forecast.
CA Jul Trade Balance C$, -0.11B, -0.63B previous, -1.13B forecast, -0.74B revised.
CA Jul Export C$, 51.27B, 50.70B previous, 50.86B revised.
CA Jul Import C$, 51.38B, 51.32B previous, 51.60B revised.
CA Q2 Labour Productivity Rate, 0.7%, -0.3% previous, 0.4% forecast.
Germany readies for all Brexit options, including no-deal.
U.S. Dept of Justice looks into social media firms over free speech.
Republicans welcome ‘no drama,’ no shutdown ahead of U.S. election.
Looking Ahead – Economic Data (GMT)
5 Sep 23:50 Japan 1 Sep w/e Foreign Bond Investment, 235.5B previous
5 Sep 23:50 Japan 1 Sep w/e Foreign Invest JP Stock, -334.9B previous
6 Sep 01:30 Australia Jul Trade Balances, 1,873M previous, 1.400M forecast
6 Sep 01:30 Australia Jul Goods/Services Imports, -1.0%
6 Sep 01:30 Australia Jul Goods/Services Exports, 3.0% previous
Looking Ahead – Events, Other Releases (GMT)
01:30 Bank of Japan board member Goushi Kataoka speaks in Yokohama, then holds a news conference Tokyo, Japan.
07:30 Swedish Central Bank announces interest rate decision. Monetary policy report will be published in Stockholm.
09:00 The Riksbank holds a press conference on the interest rate decision in Stockholm.
11:45 Sabine Lautenschlager, member of the ECB’s Executive Board, speaks at the Eurofi Financial Forum in Vienna.
14:00 The New York Fed’s President John Williams speaks with Paul Tesluk, dean of the University at Buffalo School of Management in Buffalo,N.Y.
15:00 Bank of Russia Governor Elvira Nabiullina delivers the annual Michel Camdessus Central Banking Lecture at the IMF, Washington D.C.
16:30 Swiss National Bank Vice Chairman of the Governing Board Fritz Zurbrugg speaks on the Swiss banking system at University of Lucerne, Switzerland.
18:45 Bank of Canada Senior Deputy Governor Carolyn Wilkins speaks at the Saskatchewan Trade and Export Partnership in Saskatchewan, Canada.
EUR/USD is likely to find support at 1.1522 levels and currently trading at 1.1624 levels. The pair has made session high at 1.1639 and hit lows at 1.1581 levels. The euro strengthened against dollar on Wednesday as dollar retreated modestly against a basket of major currencies following a Bloomberg report that the German and British governments had abandoned key Brexit demands, potentially easing the path for a divorce deal. The dollar index, which measures the greenback against a basket of six currencies, was down 0.3 percent at 95.154. While the euro was 0.39 percent higher against the greenback at $1.1626.The index surrendered early gains on the day as sterling soared after Bloomberg quoted people familiar with the matter as saying that Germany would be ready to accept a less detailed agreement on the U.K.’s future economic and trade ties with the EU in a bid to get a Brexit deal done. The greenback remained near multi-week highs against a basket of currencies on Wednesday, as worries about trade tensions kept investors loyal to the safe-haven greenback. Trump could impose levies on $200 billion more of Chinese imports after a public comment period on the new tariffs ends on Thursday, although it is unclear how quickly that will happen.
GBP/USD is supported in the range of 1.2783 levels and currently trading at 1.2899 levels. It reached session high at 1.2980 and dropped to session low at 1.2826 levels. Britain’s pound jumped higher against the dollar on Wednesday after a Bloomberg report that the United Kingdom and Germany were prepared to drop a key sticking point on Brexit negotiations fuelled hopes of a breakthrough in talks. Investors rushed to buy the currency after the report, lifting it nearly one percent to a three-day high of $1.2981.From trough to peak, sterling has rallied more than 1.2 percent on an intraday basis as the latest headlines prompted investors to cut short bets. Bloomberg quoted people familiar with the matter as saying that Germany would be ready to accept a less detailed agreement on the U.K.’s future economic and trade ties with the EU in a bid to get a Brexit deal done. The UK was also willing to settle for a vaguer statement of intent on the future relationship, postponing some decisions until after Brexit day, according to an official quoted in the report. The pound has weakened since hitting a near one-month high of $1.3043 at the end of August on weak economic data, doubts over Prime Minister Theresa May’s leadership and opposition from the European Union to Britain’s proposals for exiting the bloc. That had raised fears the country would crash out of the EU without a trade deal in place, which many economists warn would be disastrous for an already struggling economy.
USD/CAD is supported at 1.3122 levels and is trading at 1.3181 levels. It has made session high at 1.3201 and lows at 1.3155 levels. The Canadian dollar was little changed against its U.S. counterpart on Wednesday, holding near its lowest in nearly seven weeks as the Bank of Canada left interest rates unchanged and investors focused on talks to revamp the NAFTA trade pact.The Bank of Canada said it was closely monitoring the North American Free Trade Agreement (NAFTA) negotiations and other trade policy developments as it held its policy interest rate at 1.50 percent. The central bank, which has raised interest rates four times since July 2017, said more hikes would be needed to keep inflation on target. The United States and Canada reopened talks in a bid to salvage NAFTA amid a threat by U.S. President Donald Trump to proceed alone with a new pact with Mexico. On the data front, Canada posted its smallest trade deficit in more than 1-1/2 years in July as exports were boosted by higher prices for crude oil, Statistics Canada said. Canada runs a current account deficit, so its economy could be hurt if the global flow of trade or capital slows. The Canadian dollar was trading nearly unchanged at C$1.3180 to the greenback, or 75.83 U.S. cents. The currency, which touched its weakest since July 20 on Tuesday at C$1.3208, traded in a range of C$1.3156 to C$1.3207.
AUD/USD is supported around 0.7100 levels and currently trading at 0.7186 levels. It hit session high at 0.7198 and made session lows at 0.7175 levels. The Australian dollar got a brief lift against greenback on Wednesday as upbeat domestic economic data and weaker dollar across the board supported Australian dollar . The fleeting reprieve came as figures showed the Australian economy grew a brisk 0.9 percent in the second quarter, while annual growth raced to its highest in almost six years at 3.4 percent. The result easily topped market forecasts and even outpaced the United States’ stellar expansion. Australia’s top central banker played down recent increases in mortgage rates by domestic lenders but highlighted global risks to growth including a possible escalation of trade disputes and economic strains in emerging markets. Indeed, interest rate futures barely budged on the data with investors still not convinced the Reserve Bank of Australia (RBA) will hike rates until sometime in 2020.The Reserve Bank of Australia (RBA) was also watching out for a material lift in U.S. inflation which could force the Federal Reserve to tighten policy at a faster pace, Governor Philip Lowe said in a speech in Perth.Lowe was speaking at the RBA Board dinner in Perth after earlier announcing the benchmark cash rate was on hold at an all-time low 1.50 percent at its September board meeting.
European shares traded lower on Wednesday as trade tensions and growing worries about emerging market currencies cut investor appetite for risky assets.
UK’s benchmark FTSE 100 closed down 1.01 percent, the pan-European FTSEurofirst 300 ended the day down by 1.11 percent, Germany’s Dax ended down by 1.39 percent, France’s CAC finished the day down by 1.50 percent.
The Nasdaq tumbled on Wednesday, on pace for its biggest one-day drop in three weeks, as investors sold off technology stocks on concerns stemming from U.S. lawmakers grilling Twitter and Facebook executives over foreign efforts to tilt U.S. politics.
Dow Jones closed up by 0.7 percent, S&P 500 ended down by 0.29 percent, Nasdaq finished the day down by 1.20 percent.
U.S. Treasury prices reversed earlier losses on Wednesday after a German spokesman contradicted an earlier report that the British and German governments had abandoned key Brexit demands.
Benchmark 10-year notes gained 1/32 in price on the day to yield 2.900 percent, down from 2.902 percent on Tuesday. They rose to 2.917 percent after the Bloomberg report, the highest since Aug. 10.
Oil prices fell more than one percent on Wednesday after a U.S. Gulf storm weakened and moved away from oil-producing areas and as concerns mounted about global trade disputes and Turkey’s currency crisis hurting demand.
U.S. West Texas Intermediate (WTI) crude futures fell $1.15 to settle at $68.72 a barrel, a 1.65 percent loss.
Brent crude futures fell 90 cents to settle at $77.27 a barrel, a 1.15 percent loss. The global benchmark had climbed in the previous session to $79.72 a barrel, its highest since May.
Gold prices rose on Wednesday from an 11-day low as the U.S. dollar eased from its recent rally.
Spot gold gained 0.5 percent to $1,196.40 per ounce by 1:39 p.m. EDT (1739 GMT), after falling on Tuesday to $1,189.20, the lowest since Aug. 24.
U.S. gold futures for December delivery settled up $2.20, or 0.2 percent, at $1,201.30 per ounce, with the dollar down against a basket of major currencies.
Source: FXWire Media Round Ups