Gold Declines

On Wednesday, the greenback was little changed vs. a basket of major currencies as optimistic data on U.S. services sector offset a weaker than expected report on private job growth. On the other hand, the single currency was broadly higher in a step with a hike in higher euro-zone government bond yields. U.S. services industries expanded in September, at their fastest pace in 11 months, supporting the view of a stable U.S. economic growth which could allow the Federal Reserve to hike interest rates this year.

U.S. Private Payrolls increased 154K in September, slightly below the 166K expected. The U.S. dollar index settled at 96.10 pips.

Gold settled below $1,260, touching its lowest level in more than three months. Technically, the yellow metal could recover slightly in anticipation of the nonfarm payroll report, which will be released this Friday.

Also on Wednesday, GBP settled below $1.27 for the first time since 1985.  Cable fell to a five-year low vs. fiber as traders reacted to speculation that the UK is facing a so-called hard “Brexit”. Technically, cable could trade under pressure during the course of the week.

Euro settled yesterday at $1.12 vs. USD as the Euro- zone retail sales declined in August, following a July rise being much lower than initially estimated in a sign the UK’s vote to leave the European Union may have had a greater effect on the euro-zone than previously estimated.

On Wednesday, oil prices touched the highest level since last June, after the U.S. government reported another unexpected weekly drawdown in crude oil inventories. The U.S. crude rose as much as 2.5% and traded below $50.

The most important economic events:

• ECB Account of the Monetary Policy Meeting: (GMT 13:30) Medium
• CAD Building Permits (MoM) (AUG): (GMT 13:30) Medium – Forecast (1.0%) – Previous (0.8%).
• USD Initial Jobless Claims (OCT 1): (GMT 14:30) Medium
• USD Continuing Claims (SEP 24): (GMT 14:30) Medium

Disclaimer
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.