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America's Roundup: Dollar index touches highest since June 2017, Wall Street gains, Gold advances, Oil slips as strong dollar pressures, equities gains support-August 15th,2018

Market Roundup

• Erdogan says Turkey will boycott US electronics, lira steadies.

• Russia backs non-dollar trade with Turkey, no promise of help amid lira crisis.

• US Jul Import Prices m/m, 0.0%, 0.10% forecast, -0.4% previous, -0.1% revised.

• US Jul Export Prices m/m, -0.5%, 0.2% forecast, 0.3% previous, 0.2% revised.

• U.S. household debt rises to $13.3 trln in Q2.

• Ex-Trump aide Manafort's defense rests, case headed to jury.

• Risk of no-deal Brexit rising, "everyone needs to prepare" - British foreign minister.

• Rouble slump hits Russians' wallets, not their support for Putin.

• China revs up spending plan as economy cools, investment growth at record low.

• Bitcoin, Ethereum tumble as crypto bear market lingers.

• India not worried about weak rupee if other currencies depreciate - finmin official.

Looking Ahead - Economic Data (GMT)

• 15 Aug 00:30 Australia Aug Consumer Sentiment, 3.9% previous

• 15 Aug 1:30 Australia Q2 Wage Price Index q/q, 0.6% forecast, 0.5% previous

• 15 Aug 1:30 Australia Q2 Wage Price Index y/y, 2.1% forecast, 2.1% previous

• 15 Aug 1:30 China Jul House Prices y/y, 5.0% previous

Looking Ahead - Events, Other Releases (GMT)

• No major events are scheduled.

Currency Summaries

EUR/USD is likely to find support at 1.1300 levels and currently trading at 1.1342 levels. The pair has made session high at 1.3428 and hit lows at 1.1323 levels. The euro declined against the dollar on Tuesday as traders fret over the exposure of European banks to Turkey, whose currency rebounded from an all-time low. The Turkish lira has lost more than 40 percent of its value against the dollar this year, hit by worries over President Tayyip Erdogan's calls for lower interest rates and fraying ties with the United States. On Tuesday, however, the lira recovered some ground, trading at 6.4350 to the dollar , up 6.7 percent on the day, after plunging to an all-time low of 7.24 on Monday. Sanctions imposed by Washington on Ankara have stoked anxiety about Turkey's economy, which is already bogged down by double-digit inflation. Concerns have lingered about European banks' loans to Turkey, stoking selling of regional stocks and the single currency, analysts said. The euro was down nearly 0.3 percent at $1.13770 after touching a 13-month low at 1.13650 on Monday. An index that tracks the greenback versus a basket of other currencies was steady at 96.414, below a 13-month peak of 96.522 reached on Monday.

GBP/USD is supported in the range of 1.2697 levels and currently trading at 1.2715 levels. It reached session high at 1.2776 and dropped to session low at 1.2701 levels. Sterling declined to hit 13-month low against the dollar on Tuesday after a rebound in the dollar and as weaker-than-forecast wage growth offset an unexpected fall in Britain's unemployment rate. The pound had risen to as high as $1.2827   after official data showed unemployment fell to its lowest rate since 1975 during the second quarter.  But sterling trimmed its gains after annual wage growth - at a nine-month low of 2.4 percent and below forecasts of 2.5 percent - diluted the positive employment numbers. A recovery in the dollar then sent sterling lower, leaving it as weak as $1.2705, its lowest since late June 2017. Sterling fell heavily last week, hammered by a stronger dollar and concerns about the state of negotiations with the European Union over a trade deal for when Britain leaves the bloc. Foreign minister Jeremy Hunt added his voice on Tuesday to recent warnings about the prospect of a disorderly departure. The direction of monetary policy following a Bank of England interest rate rise earlier this month has recently taken a backseat against market worries about Brexit.BoE Governor Mark Carney said markets should prepare for further rate hikes, although borrowing costs would increase to a gradual and limited extent and depend on a smooth Brexit transition.

USD/CAD is supported at 1.3036 levels and is trading at 1.3066 levels. It has made session high at 1.3188 and lows at 1.3068 levels. The Canadian dollar strengthened against its U.S. counterpart on Tuesday as oil prices rose and the threat from the collapse of the Turkish lira ebbed. World equities markets regained their footing as Turkey's currency rebounded about 5 percent against the greenback and reassuring German economic data offset signs of slowing growth in China. Investors have worried that a crisis in Turkey could spread to other emerging market countries. Canada exports many commodities and runs a current account deficit so its economy could be hurt if the flow of trade or capital slows. The price of oil, one of Canada's major exports, jumped after Saudi Arabia said it cut production, adding to concerns over global supply as U.S. sanctions against Iran curb its exports. On the data front, Canadian home prices rose in July from June on broad-based gains in most parts of Canada, but the price increases were small compared with historical averages for the month, the Teranet-National Bank Composite House Price Index data showed on Tuesday.  The Canadian dollar was last trading 0.4 percent higher at C$1.3079 to the greenback, or 76.42 U.S. cents. The currency, which touched a near 3-week low of C$1.3179 on Monday, traded in a range of C$1.3067 to C$1.3119.

USD/JPY is supported around 110.76 levels and currently trading at 111.13 levels. It peaked to hit session high at 111.30 and made session lows at 110.73 levels. The U.S. dollar strengthened against the yen on Tuesday as traders increased their holdings of the U.S. currency on worries about the fallout from the Turkish lira's recent fall. Sanctions imposed by Washington on Ankara have stoked anxiety about Turkey's economy, already bogged down by double-digit inflation. In retaliation against trade moves by the United States, President Tayyip Erdogan said on Tuesday Turkey would boycott electronic products from the United States. The announcement had little impact on the U.S. stock market, which traded higher. Brunson is at the center of the Turkey-U.S. drama. The evangelical pastor has been under house arrest after being in a Turkish prison for 21 months. Brunson, who has lived in Turkey for more than two decades, was accused of helping supporters of Fethullah Gulen, a U.S.-based cleric who Turkish authorities say masterminded the 2016 coup attempt. An index that tracks the dollar against the euro, yen, sterling and three other currencies touched 96.794, the highest since June 2017. It was last up 0.4 percent at 96.762.While Japanese yen weakened 0.46 percent versus the greenback at 111.21 per dollar.

Equities Recap

European shares rose slightly on Tuesday after two days of heavy selling as investors' anxieties over contagion from a Turkish currency crisis faded and reassuring data from Germany helped offset the latest wobbles in China's giant economy.

The UK's benchmark FTSE 100 closed down by 0.2 percent, FTSEurofirst 300 ended the day up by 0.13 percent, Germany's Dax ended flat, and France’s CAC finished the down by 0.1 percent.

Wall Street's three major indexes rose on Tuesday with the S&P 500 posting its strongest gain in three weeks as a string of healthy earnings boosted investor optimism and a rebound in the Turkish lira eased contagion fears.

Dow Jones closed up by 0.44 percent, S&P 500 ended up by 0.64 percent, Nasdaq finished the day up by 0.65 percent.

Treasuries Recap

U.S. Treasury yields rose on Tuesday in line with the European bond market as global sentiment brightened after equities worldwide stabilized and the Turkish lira came off recent record lows against the dollar.

In afternoon trading, U.S. 10-year yields were up at 2.894 percent, from 2.877 percent late on Monday.

U.S. 30-year yields were also higher at 3.061 percent from Monday's 3.045 percent.

On the front end of the curve, U.S. 2-year yields inched up to 2.632 percent from 2.612 percent on Monday.

Commodities Recap

Gold rose from near 18-month lows on Tuesday, with futures breaking back above the key $1,200 level as the dollar softened and some analysts said the precious metal may have fallen too far.

Spot gold gained 0.04 percent at $1,193.71 per ounce by 2:41 p.m. EDT (1841 GMT). In the previous session, it hit $1,191.35, its lowest since Jan. 30, 2017.U.S. December gold futures settled up $1.80, or 0.2 percent, at $1,200.70 per ounce.

Oil prices edged lower on Tuesday, weighed down by a strengthening U.S. dollar as investors remained concerned about the financial crisis in Turkey.

Brent crude dipped 15 cents to settle at $72.46 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 16 cents to close at $67.04 a barrel.

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