Dollar Stays Weak Against Most Major Currencies

Trading 13 sept 2019 Commentaire »

With the Federal Reserve's monetary policy review due in another few days, the U.S. dollar stayed subdued against most major currencies on Friday.

After early weakness, the greenback regained some lost ground after data showed a bigger than expected increase in retail sales in the month of August.

The dollar index, which declined to a low of 98.00 earlier in the morning, recovered to around 98.30 by mid-morning, but continued to stay below the flat line. It was last seen quoting at 98.17, down 0.14% from previous close.

Against the Euro, the dollar was down 0.14%, at 1.1078. The dollar had weakened to 1.1111 earlier in the day.

Data from Eurostat showed the euro area trade surplus increased in July on higher exports, rising to a seasonally adjusted EUR 19 billion from EUR 17.7 billion in June. Exports grew 0.6% in July from June, while imports remained stable.

The Pound Sterling gained substantial ground against the greenback, with unit of sterling fetching as much as $1.2505, about 1.5% up from previous close, on rising hopes the U.K. would avoid a no-deal Brexit on October 31 and on possibility that Article 50 being extended till January 2020.

The Japanese yen was at 108.12 a dollar, little changed from previious close.

Final data from the Ministry of Economy, Trade and Industry showed Japan's industrial production expanded as estimated in July, rising 1.3% in the month.

The dollar gained more than 0.5% against the loonie, with the pair trading at 1.3282.

Against the Aussie, the dollar was down 0.23%, with the pair trading at 0.6882. The Swiss franc was flat at 0.9903.

A report released by the U.S. Commerce Department earlier in the day showed U.S. retail sales increased by more than expected in August thanks to a jump in auto sales.

The report said retail sales rose by 0.4% in August after climbing by an upwardly revised 0.8% in July. Economists had expected retail sales to rise by 0.2% compared to the 0.7% increase originally reported for the previous month.

The stronger than expected retail sales growth came as sales by motor vehicle and parts dealers spiked by 1.8% in August after inching up by 0.1% in July.

Data from the Labor Department showed import prices fell by 0.5% in August after inching up by a downwardly revised 0.1% in July. Economists had expected import prices to drop by 0.4%.

The University of Michigan's preliminary report said consumer sentiment has rebounded by more than anticipated in the month of September.

The report said the consumer sentiment index rose to 92.0 in September after plunging to a three-year low of 89.8 in August. Economists had expected the index to inch up to 90.9.

The bigger than expected rebound by the headline index came as the index of current economic conditions crept up to 106.9 in September from 105.3 in August and the index of consumer expectations climbed to 82.4 from 79.9.


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Crude Oil Futures Settle Lower For 4th Day

Trading 13 sept 2019 Commentaire »

Crude oil prices edged lower on Friday, extending losses to a fourth straight session, as traders feared a likely drop in energy demand and excess supply in the market.

The possibility of the U.S. relaxing sanctions on Iran also weighed on crude oil prices.

A report from Baker Hughes that said oil rig count in the U.S. dropped for a fourth straight week, limited oil's slide.

Despite improving signs of some positive developments on the U.S.-China trade front following the two nations making conciliatory gestures ahead of the next round of crucial talks, a notable surge in demand for energy looks unlikely.

West Texas Intermediate Crude oil futures for October ended down $0.24, or 0.4%, at $54.85 a barrel.

On Thursday, WTI crude oil futures for October ended down $0.66, or about 1.2%, at $55.09 a barrel.

For the week, WTI crude oil futures shed nearly 3%.

Baker Hughes said today that the number of active U.S. rigs drilling for oil declined by five to 733 this week.

In its latest monthly report, OPEC said global oil market would be in surplus next year. Oil demand will drop by about 60,000 barrels per day next year.

The recent meeting of OPEC members in Abu Dhabi ended without the group deciding on any deeper output cut, although OPEC and its allies urged members to implement promised cuts.

On the trade front, U.S. President Donald Trump said he would think about an interim deal with China but would rather prefer a full agreement between the two countries.


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Treasuries Move Sharply Lower On Positive Trade, Economic News

Trading 13 sept 2019 Commentaire »

Extending the significant downward trend seen over the past several sessions, treasuries moved sharply lower during trading on Friday.

Bond prices moved steadily lower throughout the session before closing firmly in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, surged up by 11.2 basis points to 1.903 percent.

With the substantial increase on the day, the ten-year yield jumped to its highest closing level in well over a month.

The sell-off by treasuries came as positive news on both the trade and economic fronts reduced the appeal of safe havens such as bonds.

On the trade front, China's Ministry of Commerce revealed plans to exempt U.S. agricultural products, including soybeans and pork, from additional tariffs.

China will add the agricultural products to a list of 16 types of American-made products granted tariff exemptions as a sign of goodwill ahead of the next round of trade talks.

The Commerce Ministry also said it welcomes President Donald Trump's move to temporarily delay raising the rate of tariffs on $250 billion worth of Chinese imports.

Meanwhile, Trump said he would think about an interim deal with China but would prefer a full agreement as the world's two largest economies look to end the widening trade war.

"If we're going to do the deal, let's get it done," Trump told reporters on Thursday. "A lot of people are talking about it, I see a lot of analysts are saying an interim deal - meaning we'll do pieces of it, the easy ones first."

"But there's no easy or hard. There's a deal or there's not a deal," he added. "But it's something we would consider, I guess."

In U.S. economic news, the Commerce Department released a report showing U.S. retail sales increased by more than expected in August amid a jump in auto sales.

The Commerce Department said retail sales rose by 0.4 percent in August after climbing by an upwardly revised 0.8 percent in July.

Economists had expected retail sales to rise by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.

The stronger than expected retail sales growth came as sales by motor vehicle and parts dealers spiked by 1.8 percent in August after inching up by 0.1 percent in July.

However, Andrew Hunter, Senior U.S. Economist at Capital Economics, called the jump in auto sales "suspicious looking," noting the surge in the nominal value of motor vehicle sales is "hard to square" with the 0.7 percent increase in the unit sales reported by manufacturers.

Excluding the jump in auto sales, retail sales came in unchanged in August after surging up by 1.0 percent in July. Ex-auto sales had been expected to inch up by 0.1 percent.

A separate report from the University of Michigan showed U.S. consumer sentiment has rebounded by more than expected in the month of September.

The Federal Reserve is likely to be in the spotlight next week, with the central bank widely expected to announce another interest rate cut following a two-day meeting ending on Wednesday.

The monetary policy decision may overshadow reports on industrial production, housing starts, existing home sales and regional manufacturing activity.


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Gold Settles Lower On Trade Deal Hopes, Retail Sales Data

Trading 13 sept 2019 Commentaire »

After early gains, gold prices drifted lower on Friday, as higher bond yields, strong retail sales data and easing worries about trade war prompted traders to go for riskier assets such as equities.

The dollar's recovery from lower levels too contributed to gold's retreat.

Gold futures for December ended down $7.90, or about 0.5%, at $1,499.50 an ounce.

On Thursday, gold futures for December ended up $4.20, or 0.3%, at $1,507.40 an ounce.

For the week, gold futures lost about 1.1%.

Silver futures for December ended down $0.608, at $17.569 an ounce, while Copper futures for December ended higher by $0.0590, at $2.6995 per pound.

Sentiment in stock markets improved after China's Ministry of Commerce revealed plans to exempt U.S. agricultural products, including soybeans and pork, from additional tariffs.

China will add the agricultural products to a list of 16 types of American-mad products granted tariff exemptions as a sign of goodwill ahead of the next round of trade talks.

Earlier, U.S. President Donald Trump had said that his administration will temporarily delay raising the rate of tariffs on $250 billion worth of Chinese goods.

A report released by the Commerce Department earlier in the day showed U.S. retail sales increased by more than expected in August thanks to a jump in auto sales.

The Commerce Department report said retail sales rose by 0.4% in August after climbing by an upwardly revised 0.8% in July.

Economists had expected retail sales to rise by 0.2% compared to the 0.7% increase originally reported for the previous month.

The stronger than expected retail sales growth came as sales by motor vehicle and parts dealers spiked by 1.8% in August after inching up by 0.1% in July.


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U.S. Business Inventories Climb More Than Expected In July

Trading 13 sept 2019 Commentaire »

A report released by the Commerce Department on Friday showed business inventories in the U.S. increased by more than expected in the month of July.

The Commerce Department said business inventories climbed by 0.4 percent in July after coming in unchanged in June. Economists had expected inventories to rise by 0.3 percent.

Retail inventories showed a notable 0.8 percent increase after slipping by 0.2 percent in the previous month, while manufacturing and wholesale inventories both rose by 0.2 percent.

The report also said business sales rose by 0.3 percent in July compared to revised data showing sales were unchanged in June. The initial estimate showed sales inched up by 0.1 percent in June.

Retail sales climbed by 0.8 percent and wholesale sales rose by 0.3 percent, but manufacturing sales edged down by 0.2 percent.

With inventories and sales both rising, the total business inventories/sales ratio was unchanged from the previous month at 1.40.


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U.S. Consumer Sentiment Rebounds More Than Expected In September

Trading 13 sept 2019 Commentaire »

After reporting a substantial deterioration in U.S. consumer sentiment in the previous month, the University of Michigan released preliminary data on Friday showing sentiment has rebounded by more than anticipated in the month of September.

The report said the consumer sentiment index rose to 92.0 in September after plunging to a three-year low of 89.8 in August. Economists had expected the index to inch up to 90.9.

The bigger than expected rebound by the headline index came as the index of current economic conditions crept up to 106.9 in September from 105.3 in August and the index of consumer expectations climbed to 82.4 from 79.9.

"While the uptick was across both current and expected economic conditions, the early September rebound was not widespread across age or income subgroups," said Surveys of Consumers chief economist Richard Curtin.

The improvement in consumer sentiment was consolidated among consumers under age 45 and households with incomes in the top third, although Curtin noted these two groups account for about half of all spending.

Curtin noted that the data indicates consumers widely expect the Federal Reserve to cut interest next week, with net declines in rates more frequently expected than any time since the depths of the Great Recession.

"These expectations are likely to diminish the impact on spending from a quarter-point rate cut, but if rates remain unchanged, it may increase negative reactions by consumers," Curtin said.

He added, "Concerns about the impact of tariffs on the domestic economy also rose in early September, with 38% of all consumers making spontaneous references to the negative impact of tariffs, the highest percentage since March 2018."

With regard to inflation, the report said one-year inflation expectations ticked up to 2.8 percent in September from 2.7 percent in August, while five-year inflation expectations fell to 2.3 percent from 2.6 percent.


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*Weidmann: ECB Stimulus Excessive; Must Avoid Undue Delay In Hiking Rates: Bild

Trading 13 sept 2019 Commentaire »

Weidmann: ECB Stimulus Excessive; Must Avoid Undue Delay In Hiking Rates: Bild


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Dollar Little Changed After U.S. Consumer Sentiment Index

Trading 13 sept 2019 Commentaire »

After the release of the University of Michigan's consumer sentiment index for September at 10:00 am ET Friday, the greenback changed little against its major rivals.

The greenback was trading at 108.07 against the yen, 0.9877 against the franc, 1.2435 against the pound and 1.1067 against the euro around 10:05 am ET.


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Dollar Bounces Off After Solid U.S. Retail Sales

Trading 13 sept 2019 Commentaire »

The U.S. dollar moved off from its early lows against its most major opponents in the European session on Friday, as U.S. retail sales climbed more than expected in August driven by a jump in auto sales.

Data from the Commerce Department showed that retail sales rose by 0.4 percent in August after climbing by an upwardly revised 0.8 percent in July.

Economists had expected retail sales to rise by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.

Excluding the jump in auto sales, retail sales came in unchanged in August after surging up by 1.0 percent in July. Ex-auto sales had been expected to inch up by 0.1 percent.

Data from the Labor Department showed a slightly bigger than expected decrease in U.S. import prices in the month of August.

The report showed import prices fell by 0.5 percent in August after inching up by a downwardly revised 0.1 percent in July. Economists had expected import prices to drop by 0.4 percent.

The currency declined against its major counterparts in the Asian session, excepting the yen. The fall was due to its safe-haven status, as trade tensions lessened after China's Ministry of Commerce revealed plans to exempt U.S. agricultural products, including soybeans and pork, from additional tariffs.

China will add the agricultural products to a list of 16 types of American-made products granted tariff exemptions as a sign of goodwill ahead of the next round of trade talks.

The greenback recovered to 108.14 against the yen, from a low of 107.91 seen at 3:00 am ET. This may be compared to a 1-1/2-month peak of 108.26 it recorded in the Asian session. Next key resistance for the greenback is likely seen around the 111.00 level.

Final data from the Ministry of Economy, Trade and Industry showed that Japan's industrial production expanded as estimated in July.

Industrial production rose 1.3 percent month-on-month in July, in line with the preliminary estimate.

Following a weekly decline to 0.9854 against the franc at 7:45 am ET, the greenback regained some traction and rose back to 0.9881. The greenback is likely to challenge resistance around the 1.00 region.

The greenback reversed from its early more than a 2-week low of 1.1109 against the euro, recovering to 1.1079 after the data. The greenback is poised to test resistance around the 1.09 mark.

Data from Eurostat showed that the euro area trade surplus increased in July on higher exports.

The trade surplus rose to a seasonally adjusted EUR 19 billion from EUR 17.7 billion in June.

The greenback appreciated to weekly highs of 0.6376 against the kiwi and 1.3243 against the loonie from yesterday's closing values of 0.6405 and 1.3210, respectively. If the greenback strengthens further, it is likely to face resistance around 0.62 against the kiwi and 1.35 against the loonie

In contrast, the greenback held steady against the pound, following a fresh 7-week low of 1.2475 hit at 5:30 am ET. The pair had closed yesterday's deals at 1.2329.

Although the greenback staged a modest recovery against the aussie after the data, it was short lived. The greenback was trading lower at 0.6878 against the aussie, compared to yesterday's closing value of 0.6866. The next possible support for the greenback is seen around the 0.71 region.

The U.S. business inventories for July and University of Michigan's consumer sentiment index for September are slated for release in the New York session.


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*U.S. Consumer Sentiment Index Rises To 92.0 In September

Trading 13 sept 2019 Commentaire »

U.S. Consumer Sentiment Index Rises To 92.0 In September


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