ICM: Dollar hits a new 14-month high ahead of Economic Data

ICM, the leading London-based FX and CFDs provider, reported that the greenback continued higher against major peers as the US dollar is serving as a safe-haven during this turmoil. On the other hand, the British Pound fell to its lowest levels since June 2017 after softer wage growth.

The dollar index which measures the strength of the greenback against a basket of major currencies rose to a peak of 96.87, the highest in more than thirteen months. The strong economic outlook of the United States and the high U.S. Treasury yields are providing support to the US dollar to act as a safe-haven in this turmoil. The dollar index rose as the greenback strengthened against major peers such as the Euro which is a main component in the index. However, the dollar erased gains against the Turkish Lira and the Russian Ruble. The USDTRY fell from an all-time high of 7.14 to trade at a low of 5.96, and the USDRUB tumbled from a high of 69.36 to trade at a low of 65.53. The July retail sales figures and the industrial production data are due today.

The Euro dropped to a thirteen month low against the United States dollar despite the better-than-expected economic data. The German ZEW economic sentiment and current conditions were higher along with a strong second quarter GDP reading. However, the common currency is under pressure due to the exposure of European banks to Turkey. As per ICM trading platform, the EURUSD traded at a low of $1.1317.

The British Pound ended lower for the ninth consecutive day against the United States dollar. The currency suffered yesterday as the Average Earnings Index Including Bonus for July came out at 2.4% versus an expectation of 2.5%. A weaker than expected wage growth lowers the chances of further rate hikes by the Bank of England. Moreover, the higher chances of a “no-deal” Brexit weigh on the sterling. As per ICM trading platform, the GBPUSD traded at a low of $1.2692. The July inflation figures are due today, a rise in the Consumer Price Index could provide support to the falling pound.

Gold prices dropped to a fresh 2018 low of $1186 despite the ongoing market uncertainty and risks. The bullion lost almost 9% of its value this year due to a stronger dollar and higher US Treasury yields. The silver ounce drifted lower to reach a new thirteen-month low of $14.87.

Oil prices fall following a report showing a surge in US crude inventories. The American Petroleum Institute reported that the US crude oil stock rose by 3.660 million barrels last week. As per ICM trading platform, the West Texas Intermediate crude futures traded at a low of $66.50 per barrel and the Brent futures dipped to a low of $72.01 per barrel. The Energy Information Administration will report the official data today.

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