ICM: Dollar Index Soars to a Fourteen-Month High Amid Turmoil

ICM, the leading London-based FX and CFDs provider, stated that the United States dollar strengthened to its highest level in more than a year against main rivals amid rising tension between the United States and Turkey.

The dollar index which measures the greenback against a basket of major currencies is trading higher for the third consecutive day where it reached a high of 96.51 during the Asian session. The robust U.S. economic data and the sharp fall in the Euro, the main component of the dollar gauge, supported the greenback. The Consumer Price Index for July rose 0.2% to raise the expectations of further rate hikes by the Federal Reserve. The dollar climbed to a new all-time high against the Turkish Lira where the USDTRY traded at a 7.15. Moreover, the USDRUB gained for the fourth consecutive day to reach 69.36, its highest level since March 2016. The safe-haven currencies were the top performers against the United States dollar where the USDJPY traded at a six-week low of 110.11, as per ICM trading platform.

ICM highlighted that British Pound tumbled against the United States dollar to trade at $1.2723, the lowest since late June. The currency has been falling for the past seven days due to a stronger dollar and continued concerns regarding a “no-deal” Brexit. On Friday, economic data showed that the British economy grew 0.4% in the second quarter versus 0.2% in the first quarter. However, the main focus remains on the Brexit deal as the Bank of England governor addressed the “uncomfortably high risk” of a “no-deal” Brexit.

Gold prices remain caught in a tight range between $1205 and $1220 despite the given uncertainty and risk. Trade war, sanctions on Russia, tensions with Turkey, and bank concerns are risky events which lead investors to gold. At the time being this is not the case, the dollar strength drove the gold ounce lower towards July 2017 low of $1205. On the other hand, the silver ounce fell to a low of 15.22 during the Asian session.

Oil prices dropped during the Asian session due to the economic woes in emerging markets and the rising trade tension which could lower the demand for oil. As per ICM trading platform, the West Texas Intermediate crude futures traded at a low of $67.37 per barrel, and the Brent futures fell to a low of $72.50 per barrel. The U.S. energy services firm, Baker Hughes, declared that the US oil rig count rose to a multi-year high of 869 last week.

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