Americas Roundup: Dollar steady on improved risk appetite, US stocks set new highs as Irma, North Korea fears ebb, Oil edges higher as OPEC output falls-September 13th, 2017

Market Roundup

• US JOLTS Job Openings Jul, 6.170M, 6.163M previous.

• US NFIB Business optimism Aug, 105.30, 105.20 previous.

• US Redbook w/e, 0.3% MM, 4.5% YY, 0.3%, 4.4% previous.

• US incomes, poverty rate bounce back to pre-recession levels in 2016.

• Corporate tax goal in doubt as Trump kicks off push on reform.

• North Korea sanctions 'nothing compared to what will have to happen'-Trump.

• Brexit talks put back a week, EU expects May speech.

• OPEC sees higher oil demand, signs of a tighter market.

Looking Ahead – Economic Data (GMT)

• 22:45 New Zealand Food Price Index Aug, -0.2% previous

• 23:50 Japan Corp Good Price MM Aug, 0.1% forecast, 0.3% previous

• 23:50 Japan Corp Good Price YY Aug, 3.0% forecast, 2.6% previous

• 23:50 Japan Business Survey Index Q3, -2.9% previous

• 00:30 Australia  Consumer Sentiment Sep, -1.2% previous

Looking Ahead – Events, Other Releases (GMT)

• 19:00 UK’s Hammond speaks at the inaugural annual dinner of UK Finance in London

Currency Summaries

EUR/USD is likely to find support at 1.1887 levels and currently trading at 1.1964 levels. The pair has made session high at 1.1972 and hit lows at 1.1924 levels. Euro declined against the dollar in the US session on Tuesday as the dollar was supported by a bounce in Treasury yields and ahead of U.S. inflation data that could influence the timing of the next Federal Reserve interest rate increase. The greenback also found support as investors further unwound bearish bets against it. The dollar index, which tracks the currency against a basket of six major rivals, was up 0.05 percent at 91.92, after rising as high as 92.08.The index rose 0.60 percent on Monday, its largest gain this month, as receding worries about North Korea and Hurricane Irma helped lift investor risk sentiment. Investor focus now turns to U.S. inflation data due on Thursday. The data is unlikely to show a significant pick-up in price pressures, with the August inflation reading forecast at 1.6 percent on an annual basis versus 1.7 percent in July. The Fed has a 2 percent inflation target.

GBP/USD is supported in the range of 1.3156 levels and currently trading at 1.3281 levels. It reached session high at 1.3295 and dropped to session low at 1.3298 levels. Sterling rose to its highest level in a year against the dollar on Tuesday, after a report showed UK inflation rose to match its highest in more than five years, adding pressure on the Bank of England to do more to support the currency. Inflation rose to 2.9 percent in August from a year earlier, more than forecast and above the BoE's 2 percent target, as households paid more for fuel and clothing. That complicates the job faced by policymakers of explaining why they are not raising interest rates. Sterling rose as high as $1.3291, its strongest since Sept. 13, 2016. Sterling has gained nearly 4 percent against the dollar in the last three weeks. Two members of the Bank's Monetary Policy Committee are already voting for higher rates. Any more defections to that camp on Thursday would be liable to drive the currency higher. But with the economy struggling, many traders doubt the Bank's ability to raise rates at all. Labour data on Wednesday will flesh out the picture further before the Bank meets.

USD/CAD is supported at 1.2076 levels and is trading at 1.2168 levels. It has made session high at 1.2180 and lows at 1.2111 levels. The Canadian dollar edged lower against its U.S. counterpart on Tuesday as Canada's yield advantage moderated and the greenback gained broadly. The gap between Canada's 5-year yield and its U.S. equivalent narrowed by 1.8 basis points to a spread of 3.1 basis points. Last week, the spread pushed above parity for the first time in nearly three years after the Bank of Canada raised interest rates for the second time in three months. The Bank of Canada struck back on Monday against criticism it had not adequately prepared markets for last week's rate hike after a prominent economist took issue with the central bank's lack of communication in the nearly two months leading up to the move. The U.S. dollar rose against a basket of major currencies as investors further unwound bearish bets against it following a bounce in Treasury yields and ahead of U.S. inflation data flagged as the next risk event for the market. The Canadian dollar was trading at C$1.2177 to the greenback, or 82.32 U.S. cents, down 0.3 percent.

AUD/USD is supported around 0.7961 levels and currently trading at 0.8016 levels. It hit session high at 0.8024 and made session lows at 0.8013 levels. The Australian dollar declined against US dollar on Tuesday as US dollar staged a broad rebound on improving risk sentiment after Hurricane Irma was downgraded without causing as much damage as feared. The Australian dollar slipped 0.29 percent to $0.8019 for its second straight session of losses. It had climbed to a more than 2-1/2 year high of $0.8125 last week. Investors had shorted the greenback for the Japanese yen last week on fears about damage to life and property in Florida from Irma, and ahead of North Korea's founding day on Sept.9.But Pyongyang marked the anniversary without further missile or nuclear tests and Irma, while hitting heavily populated areas in Florida over the weekend, lost strength and was downgraded to a tropical storm. Local data showed Australian business conditions climbed to the highest since early 2008 in August, with a marked improvement in employment intentions burnishing the outlook for further jobs growth. National Australia Bank's survey of more than 400 firms showed its index of business conditions firmed 1 point to +15 in August, triple its long-run average of +5. The Aussie is up 0.7 percent so far in September, largely due to losses in the U.S. dollar. For the year, it is up 11.1 percent, on track for its best annual performance since a 14 percent gain in 2010.

Equities Recap

European shares rose to a five-week high on Tuesday, extending the relief bounce seen in the previous session as worries about Hurricane Irma and North Korea's nuclear standoff eased.

UK's benchmark FTSE 100 closed down 0.1 percent, FTSEurofirst 300 ended the day up by 0.56 percent, Germany's Dax ended up by 0.40 percent, France’s CAC finished the day up by 0.65 percent.

U.S. stocks closed higher on Tuesday, with the S&P 500 hitting a record intraday high as investor concerns about U.S. tensions with North Korea eased and the financial impact from Hurricane Irma appeared less severe than feared.

Dow Jones closed up by 0.26 percent, S&P 500 ended up 0.34 percent, Nasdaq finished the day up by 0.33 percent.

Treasuries Recap 

U.S. long-dated Treasury yields rose for a third straight session as tepid demand for benchmark 10-year notes pressured overall bond prices.

In late trading, benchmark 10-year Treasury yields rose to 2.17 percent, from 2.125 percent late on Monday. Ten-year yields had hit 2.18 percent, a three-week high, following the 10-year auction.

U.S. 30-year bond yields rose to 2.775 percent, up from 2.739 percent in the previous session. Thirty-year yields also climbed to three-week peaks of 2.788percent.

Commodities Recap

Gold bounced up from the lowest level in more than a week on Tuesday as the dollar pared gains and U.S. President Donald Trump said U.N. sanctions on North Korea are “nothing compared to what ultimately will have to happen.

Spot gold hit its lowest since Sept. 1 at $1,322.15 an ounce in early trade and was up 0.3 percent at $1,330.68 an ounce by 2:37 p.m. EDT (1837 GMT).U.S. gold futures settled down 0.2 percent at $1,332.70.

Oil prices rose on Tuesday after OPEC forecast higher demand in 2018 and said output fell in August, signs that its production-cutting deal with non-member countries may reduce a supply glut.

U.S. crude rose 16 cents to settle at $48.32 a barrel and Brent settle up 43 cents at $54.27 a barrel.

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