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America's Roundup: Dollar falls for fourth day after Trump attacks Fed, Gold hits 1-week high, Wall Street rise, Oil higher as Iran-driven rally gathers pace-August 22nd, 2018

Market Roundup

• Trump demands Fed help on economy, complains about interest rate rises.

• Fed's Kaplan sees three or four more rate hikes, then a pause.

• Ex-Trump lawyer Cohen reaches plea deal with U.S. prosecutors -reports.

• Trump vows 'no concessions', Turkey's lira stays under pressure.

• Jury in Manafort case appears closer to verdict, queries judge.

• Russian firms, vessels hit with U.S. sanctions over N. Korea oil transfers.

• U.S., Mexico push for NAFTA autos deal, eye Canada's return.

• EU expects delay in Brexit deal beyond October target.

• US 18 Aug w/e Redbook m/m, 0.2%, 0.1% previous.

• US 18 Aug w/e Redbook y/y, 4.7%, 4.5% previous.

• CA Jun Wholesale Trade m/m, -0.8%, 0.8% forecast, 1.2% previous

Looking Ahead - Economic Data (GMT) 

• 21 Aug 22:45 Q2 New Zealand Retail sales volume q/q, 0.10% previous

• 21 Aug 22:45 Q2 New Zealand Retail Qrtly Vs Yr Ago, 3.0% previous

• 22 Aug 01:30 Q2 Australia Construction Work Done, 0.7% forecast, 0.2% previous

Looking Ahead - Events, Other Releases (GMT) 

• 1800 Federal Open Market Committee will release the minutes from its July 31-Aug. 1 policy meeting, Washington.

Currency Summaries

EUR/USD is likely to find support at 1.1452 levels and currently trading at 1.1571 levels. The pair has made session high at 1.1601 and hit lows at 1.1492 levels. The euro strengthened against dollar on Tuesday as dollar weakened after U.S. President Donald Trump slammed the Federal Reserve for raising interest rates. Trump told Reuters in an interview on Monday that he was "not thrilled" with Jerome Powell's rate hikes and said the U.S. central bank should do more to help him to boost the economy. U.S. presidents rarely criticize the Fed, whose independence is considered essential to economic stability. Trump has, however, made reducing U.S. trade deficits a priority, and the combination of rising interest rates and a strengthening dollar poses risks for export growth. Escalating trade tensions between the United States and its trading partners as well as a plunge in the Turkish lira have strengthened the dollar, as the market seeks out less risky investments in times of geopolitical turmoil.The greenback weakened on Tuesday as investors turned to other traditional flight-to-quality investments, the Japanese yen and the Swiss franc. The dollar index, a measure of the greenback's strength against a basket of six other currencies, fell 0.22 percent to 95.535 after touching 95.440, its lowest since Aug. 9. The euro strengthened 0.4 percent to a daily high of $1.154

GBP/USD is supported in the range of 12806 levels and currently trading at 1.2900 levels. It reached session high at 1.2924 and dropped to session low at 1.2809 levels. The British pound rose to a near two-week high against the greenback on Tuesday after the dollar fell following comments from U.S. President Donald Trump that he was unhappy with the Federal Reserve for raising interest rates. Sterling has recovered in recent sessions from a 14-month low, rising almost two cents from $1.2662 plumbed last week. But with the British Brexit minister headed to Brussels for the start of a series of talks aimed at averting the UK crashing out of the European Union without a trade deal, investors remain nervous, limiting potential gains for the pound. Underlining the uphill task that remains if the two sides are to agree, the UK's trade minister, Liam Fox, said on Tuesday the European Union risked damaging its standing in the world if it pursued a Brexit that put its own "ideological purity" ahead of the needs of its citizens. Investors and companies have grown increasingly concerned Britain will not be able to secure an arrangement with its largest trading partner before it is scheduled to leave the EU at the end of March 2019. The pound rose to as high as $1.2924 on Tuesday before settling up  at $1.2900, led by investors selling the U.S. currency overnight.

USD/CAD is supported at 1.3000 levels and is trading at 1.3044 levels. It has made session high at 1.3050 and lows at 1.3017 levels. The Canadian dollar strengthened to hit two weeks high against its U.S. counterpart on Tuesday, as higher oil prices and a broad decline for the greenback offset domestic data showing a surprise drop in June wholesale trade. Canadian wholesale trade decreased by 0.8 percent in June from May, the second decline in three months, led by weaker sales in the motor vehicles and parts subsector, Statistics Canada said. Economists in a poll had forecast a 0.8 percent rise. The data could weigh on prospects for further strength in Canada's economy after an expected acceleration in second quarter growth. The price of oil, one of Canada's major exports, was boosted by the prospect of lower oil supply from Iran due to U.S. sanctions. U.S. crude prices were up 1.5 percent at $67.4 a barrel.The U.S. dollar weakened against a basket of major currencies after U.S. President Donald Trump criticized the head of the Federal Reserve for raising interest rates. The currency, which was boosted on Friday by domestic data showing the highest level of inflation in nearly seven years, touched its strongest since August 9 at C$1.3015. The Canadian dollar was last trading 0.1 percent higher at C$1.3044 to the greenback. Canadian retail sales data for June is due on Wednesday, which could help guide expectations for further interest rate hikes from the Bank of Canada.

AUD/USD is supported around 0.7336 levels and currently trading at 0.7365 levels. It hit session high at 0.7380 and made session lows at 0.7339 levels. The Australian dollar strengthened against the US dollar on Tuesday as greenback eased after President Donald Trump questioned the need for higher interest rates in the United States, undermining the U.S. currency. The Aussie proved resilient to turmoil in politics at home, where Prime Minster Malcolm Turnbull survived a leadership vote with a perilously narrow margin. Markets tend to pay little attention to Australian politics, viewing the two major parties as centrist with similar economic policies overall. In particular, both are committed to a return to budget surpluses. There is also no threat to the independence of the Reserve Bank of Australia (RBA), which on Tuesday again reaffirmed the outlook for stable policy. The calm mood was clear in the bond market, where yields on Australian 10-year bonds were steady after touching eight-month lows overnight. Still, another bout of political uncertainty, and possibly an early election, could dampen consumer and business sentiment and thus spending. The bigger impact on the Aussie came when Trump said he was "not thrilled" with the Federal Reserve for raising interest rates and said the U.S. central bank should do more to help him to boost the economy.

Equities Recap

European shares closed slightly higher on Tuesday as investors on both sides of the Atlantic took a cautiously optimistic view of trade talks between the United States and China which are set to begin on Wednesday.

UK's benchmark FTSE 100 closed down by 0.2 percent, the pan-European FTSEurofirst 300 ended the day up by 0.28 percent, Germany's Dax ended up by 0.4 percent, France’s CAC finished the day up by 0.6 percent.

The benchmark S&P 500 touched a record high on Tuesday and equaled its longest-ever bull-market run, as U.S. stocks rose on encouraging earnings reports in the consumer sector and relative calm in the ongoing trade dispute between the United States and China.

Dow Jones closed up by 0.26 percent, S&P 500 ended up by 0.50 percent, Nasdaq finished the day up by 0.22 percent.

Treasuries Recap

U.S. Treasury yields rose on Tuesday on improving risk appetite, though investors were keenly awaiting a speech by Federal Reserve Chairman Jerome Powell at the end of the week.

Benchmark 10-year notes fell 7/32 in price to yield 2.848 percent, up from a low of 2.815 percent on Monday, the lowest since July 6.

The yield curve between 2-year and 10-year notes steepened to 24 basis points, from 23 basis points on Monday, which was the flattest level since 2007.

Commodities Recap

Gold rose to a one-week high on Tuesday as the dollar weakened after U.S President Donald Trump criticized the Federal Reserve for raising interest rates.

Spot gold gained 0.3 percent at $1,194.12 by 1:44 p.m. EDT (1744 GMT), after touching $1,196.27 earlier, its highest since Aug. 14. The precious metal was gaining for the third straight session.

U.S. gold futures for December delivery settled up $5.40, or 0.5 percent, at $1,200 per ounce.

Oil rose to its highest level in a week on Tuesday, ahead of a forecast drawdown in U.S. crude inventories and buoyed by the prospect of U.S. sanctions on Iran, though the trade dispute between Washington and Beijing kept traders and analysts cautious.

Brent crude futures for October delivery rose 42 cents to settle at $72.63 a barrel. The global benchmark earlier hit $72.95 a barrel, the highest level since Aug. 14.

U.S. West Texas Intermediate crude futures for October delivery, the most active contract, rose 42 cents to settle at $65.84 a barrel. The September contract expired on Tuesday and settled 92 cents higher to $67.35 a barrel.
 

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