Dollar Declines to Fresh 3-Year Lows

USD

On Wednesday, the Greenback sagged to fresh three-year lows vs. a basket of major currencies, as the end of the U.S. government shutdown failed to give support to the U.S. dollar. On the release front, traders are awaiting the U.S. Existing Home Sales (MoM) (DEC), which expected to hit -1.9% from 5.6%.

• The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down by 47% at 89.45.

EUR

The Euro rose by 0.37%, to settle at $1.2319 strongly supported by growing optimism the ECB could signal a quicker exit than expected from its stimulus program. On the release front, Euro Zone Composite Output Index rose from 58.1 in December to a near 12-year high of  58.6 in January, above forecasts for 57.9.

GBP

The Sterling pound rose as much as 0.61%, to settle at $1.4088, its highest level since the Brexit vote.

JPY

Against Yen, the U.S. dollar fell strongly be 0.62%, to settle at ¥109.60.

Gold

Early on Wednesday, Gold prices edged up to their strongest level in more than four months, as the Greenback declined to three-year lows. Gold Futures - Feb 18 (GCG8), rose by 0.35%, to settle at $1,336.50.

Oil

Oil prices settled down, negatively affected by data that showed an increase in U.S. crude oil and gasoline stockpiles. The U.S. crude inventories increased by 4.8 million barrels in the week to Jan. 19 to 416.2 million, after nine weeks of declines, the American Petroleum Institute said yesterday. Crude Oil WTI Futures - Feb 18 (CLG8) rose as much as 0.05%, to settle at $64.44 and Brent Oil Futures - Mar 18 (LCOH8) was down by 0.43% at $69.66.

The most important economic events

• EUR German ZEW Survey Expectations (JAN): (GMT 10:00) – Important – Forecast (17.7) – Previous (17.4).
• USD Markit US Manufacturing PMI (JAN P): (GMT 14:45) – Medium – Forecast (55) – Previous (55.1).
• USD Markit US Services PMI (JAN P): (GMT 14:45) – Medium – Forecast (54.4) – Previous (53.7).
• USD Existing Home Sales (MoM) (DEC): (GMT 14:45) – Medium – Forecast (-1.9%) – Previous (5.6).

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.