Gold Hits Three-Month Highs and Dollar Declines

USD

On Tuesday, the Greenback declined to three-month low vs. a basket of major currencies as markets reopened at the start of 2018, while the single currency was in striking distance of its 2017 peak vs. the USD. Meanwhile, traders are looking ahead to Wednesday’s minutes of the Fed’s December meeting and Friday’s U.S. nonfarm payrolls report for December for further signs on the future path of monetary policy.

• The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down by 0.29% at 91.972 pips, its weakest level in almost four weeks.

EUR

The single currency rose as much as 0.32% vs. the USD, to settle at $1.2045. Meanwhile, the ECB could reduce its monthly bond purchases to €30 billion in January from €60 billion, having scaled back purchases from €80 billion last April.

GBP

The Sterling rose by 0.36% vs. the Greenback, to settle at $1.3552. On the release front, market players are awaiting the UK PMI Manufacturing, which is expected to hit 57.9 from 58.2.

JPY

Against JPY, the USD fell by 0.23%, to settle at ¥112.41. No major reports are due from Japan today.

Gold

Gold prices hit over 3-month highs backed by technical factors after the yellow metal broke through strong resistance last week and as the USD had its worst performance since 2003 last year. Gold Futures - Feb 18 (GCG8), rose as much as 0.17%, to settle at $1,311.50.

Oil

Earlier today, Oil prices had their highest January opening since 2014, backed by ongoing supply cuts led by Russia and OPEC and amid large anti-government rallies in Iran.

Crude Oil WTI Futures - Feb 18 (CLG8) rose as much at 0.36% at $60.64 and Brent Oil Futures - Mar 18 (LCOH8) was up by 0.93% at $67.17.

The most important economic events:

• CAD RBC Canadian Manufacturing PMI (DEC): (GMT 14:30) – Important – Forecast (N/A) – Previous (54.4).

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.