The Greenback Hits an 11-Week High

On Tuesday, U.S. dollar surged to an 11-week high vs. a basket of major currencies  as traders increased bets that the Federal Reserve would raise interest rates by the end of the year. The U.S. dollar index rose as much as 1% and touched 97.65.

Gold fell yesterday, negatively affected by a strong USD and traded at $1,262 for the third time in a row, on growing expectations U.S. interest rates could hike in December.

Markets are awaiting the minutes of the Federal Reserve Board’s meeting, which will be released later on today. Technically, the yellow metal could trade widely and decline further to $1,240 in anticipation of such minutes.

The Pound sterling fell to $1.21 vs. USD after a number of senior officials and investors pointed to the possibility of further waves of decline in the market. Technically, Cable could decline further if it breaks the support of $1.20.

Oil prices rose as much as 3% at the beginning of the week, after Saudi Arabia and Russia both said a deal between OPEC and non-OPEC members like Russia in curbing crude production was possible. U.S. crude fell to $50.60 at the end of yesterday’s trading session.

The most important economic events:

  • EUR Euro-Zone Industrial Production w.d.a. (YoY) (AUG): (GMT 11:00) – Medium – Forecast (1.0%) – Previous (-0.5%).
  • CHF ZEW Survey (Expectations) (OCT): (GMT 11:00) – Medium – Forecast (N/A) – Previous (2.7).
  • USD U.S. Fed Releases Minutes from Sept. 20-21 FOMC Meeting: (GMT 20:00) – Medium
  • NZD Business NZ Performance of Manufacturing Index (SEP): (GMT 23:30) – Medium – Forecast (N/A) – Previous (55.1).

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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