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Americas Roundup: Dollar falters as North Korea weighs, Wall Street ends flat, Oil prices fall 2 pct, Focus on Jackson Hole meeting-August 22nd, 2017


Market Roundup

• U.S. workers have low hopes for higher pay -Fed survey.

• Britain pushes plan on goods and services in post-Brexit talks, EU skeptical.

• German growth could top expectations this year: Bundesbank. 

• Britain's current account deficit was bigger than thought in 2015 – ONS.

• Canada Wholesale Trade Jun, -0.5%, -0.2% forecast, 0.9% previous.

• Brazil consumer prices up in mid-August; 12-month rate eases.

• Pyongyang calls U.S.-South Korean war games a step to nuclear war.

Looking Ahead - Economic Data (GMT)

• No significant events

Looking Ahead - Events, Other Releases (GMT)

• 12:00 ECB’s Constancio participates in discussion at Lisbon

Currency Summaries

EUR/USD is likely to find support at 1.1726 levels and currently trading at 1.1810 levels. The pair has made session high at 1.1827 and hit lows at 1.1771 levels. The euro rose sharply against the greenback on Monday as the dollar turned lower amid geopolitical tension in North Korea, as investors braced for the annual central banking conference in Jackson Hole this week where the world's top central bankers may signal their next policy actions. The U.S. currency underperformed so far this year amid generally lackluster U.S. data and a Federal Reserve that has stuck to a gradual monetary tightening pace. South Korean and U.S. forces began computer-simulated military exercises on Monday in the wake of North Korea's weapons programs, angering the Asian communist regime. North Korea denounced the exercises as preparations for a nuclear war. Though bets on a Fed policy change have been reduced in recent days given the general U.S. political turmoil, expectations of a Fed hike may rise if Chair Janet Yellen emphasizes on Friday that the risks to inflation goals and financial stability require careful monitoring. The euro rose to trade up 0.4 percent at $1.1810. It held well below a 2-1/2-year high above $1.19 hit earlier this month, as markets bet the euro's double-digit gains this year may be too much for a central bank that is still wary of removing stimulus.

GBP/USD is supported in the range of 1.2855 levels and currently trading at 1.2895 levels. It reached session high at 1.2914 and dropped to session low at 1.2855 levels. Sterling edged up against a broadly weaker dollar on Monday but lost more ground against the euro as doubts around UK economic growth and Brexit talks continued to weigh on the currency. Britain released another pair of position papers for the divorce talks with the European Union, part of efforts by ministers to head off suggestions that negotiations are going slowly and may be delayed later this year. Doubts over the government's handling of the Brexit talks and a collapse this month in expectations for a rise in Bank of England interest rates over the next year have pushed the pound back below $1.30 and 90 pence per euro. It dipped 0.2 percent to a 10-month low of 91.51 pence per euro on Monday while gaining around 0.3 percent against the dollar to $1.2909. Meanwhile, investors were focused on this week's annual central banking conference in Jackson Hole, Wyoming, which begins on Thursday. Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are due to speak at the conference.

USD/CAD is supported at 1.2552 levels and is trading at 1.2567 levels. It has made session high at 1.2592 and lows at 1.2551 levels. The Canadian dollar strengthened against its U.S. counterpart on Wednesday as investors look toward comments from central bank officials at the annual Jackson Hole summit and domestic retail sales data later this week. The world's top central bankers will be gathering at the annual central banking conference and markets will be closely watching for any signals on monetary policy direction. Last week, the currency touched a two-week high against a U.S. dollar weighed by political uncertainty, after Canadian data showed an uptick in the rate of underlying inflation and oil prices jumped. The loonie's modest gains come even as U.S. crude prices slipped 0.47 percent to $48.28 a barrel, as the late rally last week prompted investors to close positions at a higher price. Domestic data showed wholesale trade slipping by 0.5 percent in June following eight consecutive monthly increases, greater than the 0.2 percent forecast by analysts. Retail sales figures for June due on Tuesday will be the week's main data highlight, with a poll forecasting a modest 0.3 percent rise, but flat when autos sales are excluded. The Canadian dollar was trading at C$1.2565 to the greenback, or 79.52 U.S. cents, up 0.1 percent. The currency was trading between C$1.2567 and C$1.2608.

AUD/USD is supported around 0.7883 levels and currently trading at 0.7934 levels. It hit session high at 0.7950 and made session lows at 0.7929 levels. The Australian dollar moved off recent one-month lows against the dollar on Monday but stayed in a narrow band, with traders sidelined by U.S. political turmoil and ahead of the Federal Reserve's annual Jackson Hole event. The Australian dollar held at $0.7936, far removed from Tuesday's $0.7808, the lowest level since July 18. The Aussie is down about 1 percent so far this month after solid gains in June and July. Political tensions kept traders on the edge on Monday after the departure of senior White House adviser Stephen Bannon, known for his economic nationalist views, were confirmed on Friday. Trump's decision to fire Bannon could undermine his support from far-right voters but might ease tensions within the White House and with party leaders. Investors were also are awaiting this week's meeting at Jackson Hole, Wyoming, between Federal Reserve Chair Janet Yellen and global central bankers. Investors are angling for the slightest hint on where monetary policy is headed.

Equities Recap

European stocks fell further on Monday as geopolitical jitters trickled over from Asia, though gains in carmaker Fiat Chrysler and Danish shipping firm Maersk helped limit losses.

UK's benchmark FTSE 100 closed down by 0.12 percent, the pan-European FTSEurofirst 300 ended the day down by 0.47 percent, Germany's Dax ended down by 0.89 percent, France’s CAC finished the day down by 0.61 percent.

U.S. stocks ended flat on Monday as simmering tensions between the United States and North Korea kept investors on edge, while a drop in oil prices weighed on energy shares.

Dow Jones closed up by 0.13 percent, S&P 500 ended up 0.11 percent, Nasdaq finished the day down by 0.06 percent.

Treasuries Recap
 
U.S. Treasuries were steady on Monday as investors awaited speeches by top global central bankers later this week for further signals about monetary policy, with no major data releases to set market direction.

Benchmark 10-year notes gained 4/32 in price to yield 2.18 percent, down from 2.19 percent on Friday.

Commodities Recap

Gold rose on Monday as geopolitical tensions over North Korea fueled safe-haven demand, while doubts about U.S. President Donald Trump's ability to enact pro-business policies pushed U.S. bond yields and the dollar lower.

Spot gold was up 0.6 percent at $1,292.18 an ounce by 1:54 p.m. EDT (1754 GMT). This was within sight of Friday's brief nine-month-high at $1,300.80, which came after attacks in Spain and rising fears over Trump's ability to push through tax reform and investment. U.S. gold futures for December delivery settled up 0.4 percent at $1,296.70.

Oil prices fell nearly 2 percent ahead of monthly contract expiration on Monday, pulling back from last week's rally built on signs the global market is starting to rebalance from chronic oversupply.

Brent crude futures settled down 2 percent, or $1.06 at $51.66 a barrel, while U.S. West Texas Intermediate crude futures ended down $1.14 a barrel, or 2.4 percent, at $47.37 a barrel ahead of the September contract's expiration on Tuesday.
 

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