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Americas Roundup: Dollar limps up from three-year low after worst week in 9 months, Gold prices slip but still head for weekly rise, Wall Street ends mixed, Crude rises on equity rebound-February 17th, 2018

Market Roundup

• U.S. grand jury indicts 13 Russian nationals in election meddling probe.

• US Jan Import Prices MM, 1.0%, 0.6% forecast, 0.1% previous, 0.2% revised.

• US Jan Export Prices MM, 0.8%, 0.3% forecast, -0.1% previous, 0.1% revised.

• US Jan Building Permits: Number, 1.396M, 1.300M forecast, 1.300M previous.

• US Jan Building Permits: Change MM, 7.4%, -0.2% previous.

• US Jan Housing Starts Number MM, 1.326M, 1.234M forecast, 1.192M previous, 1.209M revised.

• US Jan House Starts MM: Change, 9.7%, -8.2% previous, -6.9% revised.

• US Feb U Mich Sentiment Prelim, 99.9, 95.5 forecast, 95.7 previous.

• US Feb U Mich Conditions Prelim, 115.1, 112.0 forecast, 110.5 previous.

• US Feb U Mich Expectations Prelim, 90.2, 84.5 forecast, 86.3 previous.

• CA Dec Manufacturing Sales MM, -0.3%, 0.2% forecast, 3.4% previous, 3.8% revised.

• CA Dec Securities Cdns C$ MM, 21.99B, -4.59B previous, -4.62 revised.

• CA Dec Securities Foreign C$ MM, -1.97B, 19.56B previous, 19.20B revised.

• Canada seeks Mercosur free trade deal amid NAFTA uncertainty.

• ECB sees market volatility contained to stocks: Coeure.

• Brexit deal should strike "fair balance", says Germany's Merkel.

Looking Ahead - Economic Data (GMT)

• 18 Feb 23:00 Japan Feb Reuters Tankan DI, 35 previous

• 18 Feb 23:50 Japan Jan Exports YY, 10.3% forecast, 9.3% previous

• 18 Feb 23:50 Japan Jan Imports YY, 8.3% forecast, 14.9% previous

• 18 Feb 23:50 Japan Jan Trade Balance Total Yen, -1,002.2B forecast, 359.0B previous, 358.7B revised

Looking Ahead - Events, Other Releases (GMT)

• N/A Eurogroup meeting - Brussels

Currency Summaries

EUR/USD is likely to find support at 1.2347 levels and currently trading at 1.2404 levels. The pair has made session high at 1.2508 and hit lows at 1.2392 levels. The euro declined against the greenback on Friday after data showed stronger-than-expected housing starts and import prices, suggesting that inflation was on the rise and the economy on a stable growth path. The reports backed a growing belief that the Federal Reserve could hike interest rates at a faster-than-expected pace this year. U.S. home building rose to more than a one-year high in January, boosted by strong increases in the construction of both single- and multi-family housing units, and further gains are likely with building permits surging to their highest level since 2007. Housing starts jumped 9.7 percent to a seasonally adjusted annual rate of 1.326 million units, the Commerce Department said. Meanwhile, U.S. import prices grew more than expected, rising 1.0 percent in January, boosting the outlook for inflation in the coming months. The dollar rose on the day but remained on track to post its biggest weekly loss in nine months as negative sentiment offset any support the greenback had from higher Treasury yields. The dollar index, tracking it against a basket of major currencies, rose 0.61 percent, with the euro down 0.77 percent to $1.2410.

GBP/USD is supported in the range of 1.3932 levels and currently trading at 1.4009 levels. It reached session high at 1.4073 and dropped to session low at 1.3991 levels. Sterling slipped against the dollar on Friday as the greenback bounced from a three-year low boosted by stronger-than-anticipated U.S. inflation. The British currency fell 0.4 percent to $1.4011 after trading as high as $1.4145 in Asian trading, with analysts saying most of Friday's sterling weakness was driven by a recovery by the dollar after a poor week. Against the euro, the pound traded down 0.1 percent at 88.88 pence per euro. A falling dollar and signs that the Bank of England will tighten monetary policy faster than expected this year lifted sterling earlier this week, leaving the British currency still up around 1.6 percent since Monday. But concerns about UK economic weakness were underlined by data showing retail sales volumes rose 0.1 percent on the month in January, less than the 0.5 percent that economists had forecast in a Reuters poll, after dropping 1.4 percent in December. Sterling is up more than 4 percent against the dollar this year and in January, trading at $1.4346, it hit its strongest level since the Brexit vote in June 2016.

USD/CAD is supported at 1.2447 levels and is trading at 1.2556 levels. It has made session high at 1.2567 and lows at 1.2520 levels. The Canadian dollar weakened against its U.S. counterpart on Friday, pulling back from an earlier 11-day high as the greenback broadly climbed and after domestic data showed a drop in manufacturing sales. Canadian factory sales slipped 0.3 percent in December after recording a huge jump in November, pulled down by weakness in petroleum and coal products as well as food manufacturing, Statistics Canada said. In separate data, foreign investment in Canadian securities slipped slightly in December after five strong months but international demand over the year was high enough to set an annual record. The U.S. dollar rose against a basket of major currencies, rebounding from an earlier three-year low. Gains for the greenback weighed on the price of oil, one of Canada's major exports. U.S. crude prices were down 0.2 percent at $61.19 a barrel. The Canadian dollar was trading 0.5 percent lower at C$1.2552 to the greenback or 79.75 U.S. cents. The currency's weakest level of the session was C$1.2540, while it touched its strongest since Feb. 5 at C$1.2451.For the week, the commodity-linked loonie was headed for a 0.3 percent gain. It fell 1.2 percent last week, when global stocks had slumped.

USD/JPY is supported around 105.50 levels and currently trading at 106.26 levels. It peaked to hit session high at 106.40 and made session lows at 105.88 levels. The U.S. dollar strengthened against the Japanese yen on Friday as stronger-than-expected inflation data this week boosted greenback across the board. The U.S. dollar limped up off a three-year low against a basket of currencies but still was headed for its biggest weekly loss in nine months as negative sentiment offset any support from rising Treasury yields. Wednesday's data showed that the core consumer price index grew 0.3 percent, the biggest increase since January 2017, compared with 0.2 percent in December. That was followed by stronger-than-expected U.S. producer prices data. Both reports led to a spike in yields. Treasury yields on Friday were also tracking a decline in government bonds overseas. German and UK bonds were down on Friday, including Japanese government bonds. Yields initially rose after data showed U.S. housing starts jumped 9.7 percent to a seasonally adjusted annual rate of 1.326 million units, the highest level since October 2016. That followed an upwardly revised sales pace of 1.209 million units. But the rise in yields was shortlived.Meanwhile U.S. import prices climbed more than expected, rising 1.0 percent in January, boosting the outlook for inflation in the coming months.

Equities Recap

European shares gained on Friday, snapping a three-week losing streak as earnings updates continued to impress and volatility and jitters over rising inflation eased.

UK's benchmark FTSE 100 closed up by 1.1percent, the pan-European FTSEurofirst 300 ended the day up by 1.11 percent, Germany's Dax ended up by 0.9 percent, France’s CAC finished the day down by 1.2 percent.

Gain on Wall Street evaporated on Friday after a U.S. grand jury indicted several Russians for interfering in with the 2016 presidential election to help then-candidate Donald Trump.

Dow Jones closed up by 0.05 percent, S&P 500 ended up by 0.04 percent, Nasdaq finished the day down by 0.24 percent.

Treasuries Recap

U.S. Treasury prices edged higher on Friday, as investors bought back bonds after a selloff earlier in the week spurred by robust U.S. inflation data that fed the view that the Federal Reserve may hike interest rates more aggressively than expected.

In late trading, U.S. benchmark 10-year Treasury note yields fell to 2.873 percent, from Thursday's 2.893 percent.

U.S. 30-year yields dropped to 3.130 percent, from 3.145 percent late on Thursday.

Commodities Recap

Gold prices dipped on Friday, but still hovered near a three-week high, as the U.S. dollar index bounced from a three-year low and investors worried that U.S. inflation could heat up.

Spot gold was 0.3 percent lower at $1,348.58 per ounce by 2:21 p.m. EST (19:21 GMT), off a three-week peak of $1,361.76 in early trade. U.S. April gold futures settled up $0.9, or 0.1 percent, at $1,356.20 per ounce.

Oil prices rose on Friday, as the rebound in the global equities market and the dollar's recent weakness supported their recovery from last week's slide. 

U.S. West Texas Intermediate crude for March delivery rose 34 cents to settle at $61.68 a barrel. Brent rose settled up 51 cents at $64.84.U.S. April gold futures settled up $0.9, or 0.1 percent, at $1,356.20 per ounce.
 

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