Dollar Stays Firm On Trade Uncertainty

Trading 09 nov 2019 Commentaire »

The U.S. dollar stayed firm right through the session on Friday and hit a three-week high as well in the process, amid renewed uncertainty about the much talked about rollback of existing tariffs by the U.S. and China.

U.S. President Donald Trump told reporters on Friday that he has not agreed to roll back existing tariffs.

On Thursday, there were reports that the two countries, the U.S. and China, had agreed to lift tariffs on each other's goods. However, there were also reports that the proposal to rollback tariffs was opposed by several advisers of the Trump administration.

A report from Reuters said the idea of rolling back tariffs faces fierce internal opposition from Trump's advisers. The report said that sources familiar with the talks told Reuters the idea of a tariff rollback was not part of the original October "handshake" deal between Trump and Chinese Vice Premier Liu He.

The dollar index rose to 98.40 about an hour past noon and stayed firm around that mark thereafter. It was last seen at 98.38, up by about 0.25% from previous close.

Against the Euro, the dollar was at 1.1019, well off previous close of 1.1050.

The pound sterling was weaker by about 0.3% with a unit fetching $1.2776 as against $1.2815 late Thursday.

The Japanese yen was slightly up against the dollar, with a unit of the U.S. currency fetching 109.22 yen, less than yesterday's close of 109.28 yen.

The Aussie was quite weak against the dollar with the AUD-USD pair at 0.6859, more than 0.5% from previous close.

The dollar was up notably against the loonie and Swiss franc as well, at 1.3228 and 0.9974, respectively.

The Canadian dollar depreciated after data from Statistics Canada showed that employment dropped unexpectedly in the month of October.

The report said that employment fell by 1,800 jobs in October after an increase of 53,700 jobs in the previous month. Economists had expected employment to rise by about 14,700 jobs.

The unemployment rate was 5.5% in October, unchanged from September and in line with economist estimates.

In U.S. economic news, consumer sentiment in the U.S. has seen a slight improvement in the month of November, according to preliminary data released by the University of Michigan on Friday.

The report said the index of consumer expectations rose to 85.9 in November from 84.2 in October, while the current economic conditions index fell to 110.9 from 113.2.

The report said the consumer sentiment index inched up to 95.7 in November after rising to 95.5 in October. Economists had expected to index to tick up to 95.9.


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Treasuries Close Roughly Flat Following Lackluster Session

Trading 09 nov 2019 Commentaire »

Treasuries showed a lack of direction over the course of the trading session on Friday before ending the day roughly flat.

After rebounding from an initial move to the downside, bond prices drifted back toward the unchanged line as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 1.933 percent.

Despite the lackluster performance, the modest uptick lifted the ten-year yield to its highest closing level in over three months.

The choppy trading on the day came as traders digested conflicting information regarding negotiations of a U.S.-China trade deal.

A Chinese Commerce Ministry spokesman said Thursday that the U.S. and China had agreed to roll back existing tariffs as part of a phase one trade deal.

However, President Donald Trump told reporters at the White House on Friday that he has not agreed to lift the tariffs on China.

The comments from Trump came after a report from Reuters said the idea of rolling back tariffs faces fierce internal opposition from the president's advisers.

Multiple sources familiar with the talks told Reuters the idea of a tariff rollback was not part of the original October "handshake" deal between Trump and Chinese Vice Premier Liu He.

Citing current and former administration officials, Reuters said there is a divide within the administration over whether rolling back tariffs will give away U.S. leverage in the negotiations.

The latest reports have sparked renewed uncertainty about what type of trade deal Trump will ultimately be willing to accept.

Trump has repeatedly criticized past administrations for being too weak on China, but he would also like a big political victory ahead of next year's presidential election.

Meanwhile, traders largely shrugged off a report from the University of Michigan showing a slight improvement in U.S. consumer sentiment in the month of November.

The report said the consumer sentiment index inched up to 95.7 in November after rising to 95.5 in October. Economists had expected to index to tick up to 95.9.

"The early November reading on consumer sentiment was nearly identical to last month's and the average 2019 level (95.6)," said Surveys of Consumers chief economist Richard Curtin.

He added, "Consumers did voice a slightly more positive outlook for the economy, which was offset by a slightly less favorable outlook for their own personal finances."

Curtin said one-in-four consumers spontaneously made negative references to tariffs but noted references to the impact of Trump's impeachment on economic prospects were virtually non-existent.

Reports on consumer and producer price inflation, retail sales and industrial production may attract some attention next week, although traders are likely to keep a closer eye on developments on the trade front.


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Crude Oil Futures End Slightly Higher

Trading 09 nov 2019 Commentaire »

Crude oil futures settled modestly higher on Friday despite higher crude inventories and renewed uncertainty about U.S.-China trade deal.

West Texas Intermediate Crude oil futures for December ended up $0.09, or 0.2%, at $57.24 a barrel.

On Thursday, WTI crude oil futures ended up $0.80, or 1.4%, at $57.15 a barrel.

WTI crude oil futures gained about 1.9% in the week.

Brent Crude oil futures ended up $0.26, at $62.56 a barrel.

Oil prices edged lower earlier in the session, weighed down by comments by the U.S. President Donald Trump that he has not agreed to roll back tariffs on Chinese goods.

Trump's comments came after both the U.S. and China said on Thursday that they have agreed to roll back tariffs on each other's goods if the interim trade deal is completed.

However, subsequent reports said Trump's key advisers were opposing the proposal to cut tariffs on Chinese goods.

According to Baker Hughes, the number of active U.S. rigs drilling for oil dropped by 7 to 684 this week, falling for the third successive week. The total active U.S. rig count, meanwhile, also fell by 5 to 817, according to the data released.

Data released by the Energy Information Administration Wednesday morning said crude oil stockpiles increased by 7.9 million barrels in the week ended November 1, more than five times the expected increase.


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Gold Settles Modestly Lower For The Day, Sheds 3.2% In Week

Trading 09 nov 2019 Commentaire »

Gold prices retreated after early gains on Friday, even as doubts about the prospects of a formal U.S.-China trade deal resurfaced after U.S. President Donald Trump said he has not agreed to cut tariffs on Chinese goods.

The dollar's strength too weighed on the yellow metal. The dollar index, which advanced to 98.40, gaining in strength gradually, was last seen at 98.36, up 0.23% from previous close.

Gold futures for December ended down $3.50, or about 0.2%, at $1,462.90 an ounce.

On Thursday, gold futures for December ended down $26.70, or 1.8%, at $1,466.40 an ounce on news that China and the U.S. have agreed to roll back tariffs on each other's goods.

For the week, gold futures shed about 3.2%.

Silver futures for December ended down $0.187 at $16.823 a ounce, while copper futures for December settled at $0.0455 at $2.6820 per pound.

Optimism about a potential U.S.-China trade deal waned after reports suggested that a plan to roll back tariffs on each other's goods in phases has met opposition from some advisers to U.S. President Donald Trump.

In economic news, consumer sentiment in the U.S. has seen a slight improvement in the month of November, according to preliminary data released by the University of Michigan on Friday.

The report said the index of consumer expectations rose to 85.9 in November from 84.2 in October, while the current economic conditions index fell to 110.9 from 113.2.

The report said the consumer sentiment index inched up to 95.7 in November after rising to 95.5 in October. Economists had expected to index to tick up to 95.9.

A report from the Commerce Department showed U.S. wholesale inventories fell by slightly more than anticipated in the month of September, sliding by 0.4% after inching up by a downwardly revised 0.1% in August.

Economists had expected inventories to dip by 0.3% compared to the 0.2% uptick originally reported for the previous month.


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