Fundamental Analysis 2017.09.11 – USD Recovers After Two Year Record Low

After yet another week of the USD experiencing a controlled free-fall as a result of Hurricane Harvey being succeeded by Hurricane Irma, a renewal of frictions and threats between the US and N. Korea after Pyongyang’s continued missile tests, the dollar finally started recovering.

The abiding of the N. Korean threat, Hurricane Irma being less destructive than forecasted – which in turn allowed refineries in the Gulf Region to continue rebuilding and recovery after the destruction experienced during Hurricane Harvey – all contributed to the USD seeing a marked increase.

Along with the US currency Asian Stock also slightly climbed – a secondary or auxiliary victim of Kim Jong Un’s threats, due to region’s geographic proximity to N. Korea – something we saw when missiles launched by Pyongyang’s administration, flew over northern Japan. But as market sentiment relaxed so did the risk-off that was adopted during last week’s trading.

Oil also saw a boost as news that Saudi Arabia intends a continuation of their oil production cuts beyond the predetermined March 2018. Oil took a significant hit after the Hurricane Harvey caused refineries in the Gulf Region to stop production – thus demand for crude dropped as a result – causing crude prices to slip slightly. After refineries started producing again, Harvey was downgraded to a tropical storm and the drop in refined products were off-set by other refineries outside the states, the commodity’s price stabilized and increased.

Today’s economic calendar seems a little lean of economic news with the most significant being Canada’s Housing Starts for August (YoY).
Tomorrow Sept. 12th we can expect the UK CPI for August (YoY)

Sept. 13th see the US Producer Price Index for August

Sept. 14th Australia’s Unemployment Rates will be released, along with the SNB’s Interest Rate Decision, BoE’s Interest Rate Decision, its Monetary Policy Summary and the US’s Consumer Price Index – so Thursday seems like an especially significant day to watch for market movements.

The US Retail Sales for August are slated for release on the 15th of Sept.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.

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