Americas Roundup: Dollar mostly steady as traders await Trump news conference, Gold hits 6-week high on Trump, Brexit concerns-January 11th, 2017

Market Roundup

•    US small business confidence soars to 12-year high (105.80 v 98.4 in Nov) –NFIB.

•    US JOLTS Nov 5.522m v forecast 5.555m, 5.451m previous.

•    Fed 2016 profits to US Treasury fall as interest to banks jumps.

•    Eurozone yields fall as politics outweigh supply expectations, safe haven trumps growth/inflation.

•    Stormy GBP slides to 2-mos low vs USD, euro; MXN at record low; OECD chief sees more weakening.

•    China vows to contain corporate debt levels as inflation heats up, analysts warn speculation in commodities may be building.

•    Germany’s BDI says protectionist U.S. could dent growth, expects 2-3% export growth in 2017.

•    Germany's far-right leader Meuthen: Split euro zone in two; conceivable that weak countries leave.

•    French industry output surges beyond expectations, pointing to strong end to last year.

Looking Ahead – Economic Data (GMT)

•    23:50 Japan Foreign Reserves Dec 1219.30b-previous

•    05:00 Japan Coincident Indicator MM* Nov 1.4- previous

•    05:00 Japan Leading Indicator* Nov 1- previous

Currency Summaries

EUR/USD is likely to find support at 1.0451 levels and currently trading at 1.0557 levels. The pair has made session high at 1.0605 and hit lows at 1.0550 levels. The U.S. dollar was little changed against euro on Tuesday on nervousness ahead of U.S. President-elect Donald Trump's first news conference set for Wednesday. Investors awaited details about possible economic policies from President-elect Donald Trump who was scheduled for a news conference on Wednesday. Uncertainty ahead of Trump's comments, however, led to muted moves in currency pairs. The dollar index, which measures the greenback against a basket of six major currencies, has climbed more than 4 percent since Trump's win on Nov. 8 as investors have bet his promised fiscal expansion will boost inflation and growth, leading to a faster pace of Federal Reserve interest rate increases. The euro which hit an 11-day high of $1.0626 in early trading, was trading at $1.0559.

GBP/USD is supported in the range of 1.2100 levels and currently trading at 1.2158 levels. It reached session high at 1.2191 and dropped to session low at 1.2145 levels. Sterling recovered from a slide to two-month lows against the dollar on Tuesday as a week of worry about Britain's plans to leave the European Union kept the currency under heavy pressure. Early in the European session, the pound added to losses of more than 1 percent suffered the previous day, before it steadied above $1.2150 in the US session. British Prime Minister Theresa May said on Sunday she would set out her strategy for Brexit over the coming weeks, denying suggestions she was “muddled” in the pursuit of what she called the right relationship with the EU. However, the outlook for the pound remained shaky, especially after weekend comments by Prime Minister Theresa May saying she was not interested in Britain keeping “bits” of its EU membership. Sterling steadied after hitting $1.2107 in early trading, its lowest level since Oct. 25, and was last up slightly at $1.2168.

USD/CAD is supported at 1.3154 levels and is trading at 1.3230 levels. It has made session high at 1.3245 and lows at 1.3189 levels. The Canadian dollar edged higher against its U.S. counterpart on Tuesday as Canadian dollar strengthened after upbeat domestic housing starts data suggested the country's long housing boom may not yet be over. Housing starts rose to a seasonally adjusted annual rate of 207,041 units in December from an upwardly revised 187,273 units in November, the Canada Mortgage and Housing Corp said. The value of Canadian building permits edged 0.1 percent lower in November due to lower construction intentions in Alberta following a surge the month before ahead of provincial building code changes, data from Statistics Canada showed. The Canadian dollar was trading at C$1.3223 to the greenback, or 75.67 U.S. cents, slightly stronger than Monday's close of C$1.3230, or 75.59 U.S. cents.

AUD/USD is supported around 0.7300 levels and currently trading at 0.7366 levels. It hit session high at 0.7384and made session lows at 0.7329 levels. The Australian dollar added to broad gains against greenback on Tuesday after their U.S. counterpart ran into more profit-taking ahead of U.S. President-elect Donald Trump's first news conference set for Wednesday. The market is looking for more clues on Trump's spending plans in the first speech since his shock election win in November. Trump, who takes office on Jan. 20, is scheduled to hold his first news conference on Wednesday since winning the November election. Domestically, Australian data on retail sales undershot forecasts with a rise of only 0.2 percent, but that still left consumer spending on a firmer track for the fourth quarter. Data from the Australian Bureau of Statistics (ABS) out on Tuesday showed retail sales grew a disappointing 0.2 percent in November from October when they increased 0.5 percent. However, sales in October and November put together were 1.5 percent faster than the first two months of the previous quarter, bolstering hopes the economy had turned around after contracting in the July-Sept period.

Equities Recap

Britain's FTSE 100 blue-chip index hit fresh record highs on Tuesday, boosted by gains among retailers, while a rally in mining stocks more than offset weaker financials, helping European shares end slightly in positive territory.

UK's benchmark FTSE 100 closed up 0.6, the pan-European FTSEurofirst 300 ended the day up by 0.15 percent, Germany's Dax ended up by 0.2 percent, France’s CAC finished the day up by 0.06 percent.

The Nasdaq hit a record intraday high on Tuesday, extending its run as healthcare stocks rose for the sixth straight session, while a jump in banks lifted the S&P 500.
Dow Jones closed down by 0.15 percent, S&P 500 ended up 0.17 percent, Nasdaq finished the day up by 0.36 percent.

Treasuries Recap 

U.S. Treasury yields held steady on Tuesday as solid investor demand for $24 billion of three-year government notes offset mild selling in bonds after Wall Street stock prices pared early losses.

The yield on benchmark 10-year Treasuries was little changed at 2.381 percent as it bounced in a narrow 3 basis-point range.
Two-year yields were flat at 1.194 percent, while 30-year yields nudged up 0.4 basis point to 2.972 percent.

Commodities Recap

Gold rose to a six-week peak on Tuesday, supported by earlier weakness in the dollar ahead of a news conference on Wednesday by U.S. President-elect Donald Trump.

Spot gold hit its highest since Nov. 30 at $1,190.46 an ounce, and was up 0.4 percent at $1,185.36 an ounce by 3:19 p.m. EST (2019 GMT).U.S. gold futures settled up 0.05 percent at $1,185.50.

Oil prices fell 2 percent on Tuesday to the lowest in nearly a month, extending the previous session's sell-off as the U.S. dollar strengthened and doubts mounted over whether producing countries would implement of a deal to cut output.

Brent crude settled at $53.64 a barrel, down $1.30, 2.4 percent after hitting the lowest level since Dec. 15 at $53.60. U.S. crude futures ended down $1.14, or 2.2 percent, at $50.82 per barrel.

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