Dollar hits 7-month highs vs. yen, euro at 1-year lows – Sean Seshadri

The dollar rose to seven month highs against the yen on Tuesday, while the euro continued to wallow at one year lows amid mounting expectations that the European Central Bank will announce fresh easing measures.

EUR/USD touched lows of 1.3115, the weakest level since September 6 2013 and was last at 1.3127.The euro has come under heavy selling pressure in recent sessions amid mounting expectations that the ECB will implement fresh measures as a way to shore up long term inflation expectations after data showed that the annual rate of euro zone inflation slowed to a five year low in August.

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Concerns that sanctions against Russia would act as a drag on growth in the euro zone also continued to pressure the single currency lower.The dollar advanced to seven month highs against the yen, with USD/JPY climbing 0.46% to 104.82.

The dollar was boosted by weakness in the euro and by gains in Asian equities markets overnight, which curbed investor demand for the safe haven yen.Elsewhere, GBP/USD was down 0.22% to 1.6569 ahead of U.K. construction sector data due out later in the session.

USD/CHF touched 10-month highs of 0.9207 and was last trading at 0.9196, unchanged for the day.Earlier Tuesday, official data showed that Switzerland’s economy stagnated in the second quarter, with growth dragged down by falling exports and lower construction spending.

On a year-over-year basis, the Swiss economy grew 0.6%, missing expectations of 1.7% and slowing from 2.1% in the previous quarter.AUD/USD was down 0.32% to a one week low of 0.9288 after the Reserve Bank left rates unchanged earlier Tuesday and said that the overvalued Australian dollar is weighing on efforts to support growth.Elsewhere, NZD/USD was down 0.31% to 0.8348, while USD/CAD added 0.23% to trade at 1.0894.

http://www.investing.com/news/forex-news/dollar-hits-7-month-highs-vs.-yen,-euro-at-1-year-lows-306824

Gold prices higher in Asia after China HSBC PMI shows steady demand – Sean Seshadri

Gold prices rose in Asia on Monday after manufacturing data pointed to steady demand and on possible new sanctions on Russia and with markets in the U.S. and Canada closed for the Labor Day holiday.Gold for December delivery traded at $1,287.70 a troy ounce, up 0.02%, after ending last week at $1,288.20 a troy ounce on the Comex division of the New York Mercantile Exchange.

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Gold futures rose 0.62% last week, but ended the month down 0.51%.In China, the August CFLP manufacturing PMI came in at 51.1, just a nick below the 51.2 exepected.The HSBC final manufacturing PMI came in at 50.2, just below the 50.3 expected.

U.S. officials are working closely with the European Union to keep their Russia sanctions programs aligned in timing and severity.On Saturday, European Union leaders agreed to draw up options within a week for possible new sanctions against Russia, with action to follow quickly unless Moscow takes clear steps to scale back its intervention in Ukraine. Reports have emerged that hundreds of Russian soldiers have entered Ukraine.

European Council President Herman Van Rompuy said the bloc wouldn’t set out specific criteria for triggering fresh sanctions but said there was “determination” to ensure Russia paid an appropriate price for heightening tensions.

“I can assure you that everyone is fully aware that we have to act quickly given the escalation on the ground,” he said at the end of a summit of European leaders.In China, we get the August CFLP manufacturing PMI at 0900 (0100 GMT) with 51.2 exepected.

This would be followed by the HSBC final manufacturing PMI at 0945 (0145 GMT) with 50.3 expected, unchanged from the previous month final.In the week ahead, trading volumes are likely to remain light on Monday, with U.S. markets closed for the Labor Day holiday. Investors will be focusing on Thursday’s outcome of the ECB’s monthly monetary policy meeting, as well as Friday’s closely watched U.S. nonfarm payrolls report.

Monetary policy announcements by central banks in Australia, Japan, Canada and the U.K. will also be awaited.Last week, gold prices hit $1,297.60 an ounce, their highest level since Aug. 20 on Thursday after Ukraine’s president said Russian troops had entered the conflict in eastern Ukraine to support pro-Russian separatists there.

However, gold retreated from the day’s highs after data showed that U.S. gross domestic product expanded at an annual rate of 4.2% in the second quarter, up from a preliminary estimate of 4% and rebounding from a first quarter contraction.

http://www.investing.com/news/commodities-news/gold-prices-higher-in-asia-after-china-hsbc-pmi-shows-steady-demand-306696

Gold futures inch higher on weaker dollar – Sean Seshadri

Gold futures edged higher on Wednesday, as a weaker U.S. dollar boosted the appeal of the precious metal.On the Comex division of the New York Mercantile Exchange, gold for December delivery rose 0.13%, or $1.70, to trade at $1,286.90 a troy ounce during European morning hours.

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Prices traded in a range between $1,281.10 and $1,287.40 an ounce. A day earlier, gold tacked on 0.49%, or $6.30, to settle at $1,285.20.Futures hit a nine-week low of $1,273.40 on August 21 as market players priced in a greater risk of a sooner-than-expected hike in U.S. interest rates.

Prices were likely to find support at $1,273.40, the low from August 21 and resistance at $1,299.30, the high from August 20.The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.18% to hit 82.54, as investors locked in gains from a recent rally.

Dollar weakness usually benefits gold, as it boosts the metal’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.The greenback rallied to an 11-month high against the euro after European Central Bank President Mario Draghi told the Jackson Hole gathering last week that the central bank is ready to take more unconventional action if needed to stimulate a sluggish euro zone economy.

Meanwhile, the S&P 500 closed above the key 2000-level for the first time ever on Tuesday after upbeat data boosted optimism over the health of the U.S. economy.The Conference Board said its index of U.S. consumer confidence rose to a seven-year high of 92.4 this month from a reading of 90.3 in July. Analysts expected the index to decline to 89.0 in August.

The robust consumer confidence report came after data from the U.S. Commerce Department showed that total durable goods orders, which include transportation items, surged by 22.6% last month, blowing past expectations for an increase of 7.5%.

Federal Reserve Chair Janet Yellen said at Jackson Hole that the U.S. economy is recovering and added the labor market is improving as well.Also on the Comex, silver for December delivery advanced 0.2%, or 3.9 cents, to trade at $19.49 a troy ounce.

http://www.investing.com/news/commodities-news/gold-futures-inch-higher-on-weaker-dollar-305788

Forex – Dollar little changed after new home sales disappoint – Sean Seshadri

The dollar was little changed against the other major currencies on Monday, despite the release of disapointing U.S. new home sales data as Federal Reserve Chair Janet Yellen’s upbeat comments on Friday still supported demand for the greenback.

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In a report, the U.S. Commerce Department said new home sales dropped by 2.4% to 412,000 units last month, compared to expectations for an increase of 5.7% to 430,000.New home sales in June were revised up to 422,000 units from a previously reported 406,000 units.

The dollar remained supported after Fed Chair Janet Yellen said on Friday that the U.S. economy is recovering and added the labor market is improving as well.Ms. Yellen was speaking at the Fed’s annual meeting of top central bankers and economists in Jackson Hole, Wyoming.

EUR/USD slid 0.28% to 1.3201, after European Central Bank President Mario Draghi told the Jackson Hole gathering that the central bank is ready to take more unconventional action if needed to stimulate a sluggish euro zone economy.

Earlier Monday, the German research institute Ifo said its Business Climate Index fell to a more than one-year low of 106.3 this month, below forecasts for 107.0 and down from a reading of 108.0 in July.The weak data dampened optimism over the health of the euro zone’s largest economy.

The pound held steady, near five-month lows with GBP/USD at 1.6584.The dollar was little changed against the yen and the Swiss franc, with USD/JPY at 103.96 and with USD/CHF at 0.9144.Meanwhile, AUD/USD edged down 0.19% to 0.9298 and NZD/USD retreated 0.59% to 0.8352, while USD/CAD rose 0.23% to 1.0970.

http://www.investing.com/news/forex-news/forex—dollar-little-changed-after-new-home-sales-disappoint-305330

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Forex – USD/CAD trims gains after Canadian wholesales data – Sean Seshadri

The U.S. dollar trimmed back gains against the Canadian dollar on Wednesday after official data showed that Canadian wholesale sales were higher for a consecutive third month in June.USD/CAD was flat at 1.0942, off session highs of 1.0938.

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The pair was likely to find support at around 1.0920 and resistance at about the 1.0985 level.The Canadian dollar firmed up after Statistics Canada reported that wholesale sales rose 0.6% to C$53.0 billion in June. Economists had forecast an increase of 1.3%.

Wholesale sales for May were revised up to 2.3% from a previously reported gain of 2.2%.Demand for the greenback continued to be underpinned after recent reports indicated that the economic recovery is on track.

Data on Tuesday showed that U.S. housing starts jumped 15.7% in July, while the number of new permits granted to home-builders also accelerated.The data pointed to underlying strength in the housing sector, which stalled in the second half of last year.

The data offset a report showing that U.S. consumer prices rose just 0.1% in July.Investors were looking ahead to the minutes of the Fed’s latest meeting due for release later Wednesday for further indications on the future direction of monetary policy.

Market watchers were also awaiting a speech by Fed Chair Janet Yellen in Jackson Hole on Friday.Elsewhere, the loonie, as the Canadian dollar is also known, was higher against the broadly weaker euro, with EUR/CAD down 0.22% to 1.4543.

http://www.investing.com/news/forex-news/forex—usd-cad-trims-gains-after-canadian-wholesales-data-304484

Crude drops on IEA report, waning fears of Iraq supply disruptions – Sean Seshadri

Crude prices fell on Tuesday in wake of a bearish report from the International Energy Agency as well as perceptions that Iraqi oil exports will flow as normal despite an insurgency taking place in the country.In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in September traded down 0.95% at $97.15 a barrel during U.S. trading. New York-traded oil futures hit a session low of $96.87 a barrel and a high of $97.94 a barrel.

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The September contract settled up 0.44% at $98.08 a barrel on Monday.Nymex oil futures were likely to find support at $96.55 a barrel, last Thursday’s low, and resistance at $98.58 a barrel, Monday’s high.
The International Energy Agency earlier cut its 2014 global oil demand growth forecast by 180,000 barrels per day to 1.0 million due to lower‐than‐expected deliveries in the second quarter and the International Monetary Fund’s weaker outlook for economic growth.

As the economy improves in 2015, the agency said, demand is set to accelerate 1.3 million barrels per, though crude futures fell on concerns that the global economy is awash in crude.”Despite armed conflict in Libya, Iraq and Ukraine, the oil market today looks better supplied than expected, with an oil glut even reported in the Atlantic basin,” the IEA said in its monthly oil-market report.

Waning fears of supply disruptions pressured prices lower as well.In Iraq, Haidar al-Abadi, the deputy speaker of parliament, was named as the country’s new prime minister on Monday in place of Nuri al-Maliki, who has refused to step down.

Maliki said the decision was a “dangerous violation” of the constitution and vowed to “fix the mistake”.U.S. President Barack Obama said the naming of Abadi was an important step for Iraq towards rebuffing Islamic State militants.

The U.S. recently began air strikes targeting militants from the Islamic State insurgent group in the northern part of the country in an effort to protect Iraqi civilians from the uprising as well as U.S. personnel in the country.Still, the country’s major oilfields remain far to the south of the fighting, and with U.S. airstrikes halting the advance, fears of supply disruption eroded further on Tuesday, which further dampened oil futures.

http://www.investing.com/news/commodities-news/crude-drops-on-iea-report,-waning-fears-of-iraq-supply-disruptions-302903

Crude falls despite upbeat U.S. inventory report – Sean Seshadri

Crude prices fell on Wednesday despite an upbeat weekly U.S. inventory report, as investors traded on concerns that the global economy is awash in crude.In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in September traded down 0.49% at $96.91 a barrel during U.S. trading. New York-traded oil futures hit a session low of $96.75 a barrel and a high of $98.12 a barrel.
The September contract settled down 0.93% at $97.38 a barrel on Tuesday.

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Nymex oil futures were likely to find support at $96.26 a barrel, the low from Feb. 3, and resistance at $102.10 a barrel, the high from July 28.The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories declined by 1.8 million barrels in the week ended August 1, compared to expectations for a decline of 1.7 million barrels.

Total U.S. crude oil inventories stood at 365.6 million barrels as of last week.The report also showed that total motor gasoline inventories decreased by 4.4 million barrels, confounding forecasts for a gain of 0.3 million barrels, while distillate stockpiles fell by 1.8 million barrels, stronger than expectations for an increase of 0.9 million barrels.

Still, while the U.S. economy continues to show signs of more sustained economic recovery, concerns the rest of the world isn’t catching up as quick watered down crude oil prices, as a less robust global economy will consume less fuel and oil.

Italy’s economy shrank for a second consecutive quarter in the three months to June, which technically means the country is in recession.ISTAT, Italy’s statistical office, reported that the country’s gross domestic product contracted by 0.2% in the second quarter, confounding expectations for growth of 0.2%.

Italy’s economy shrank 0.1% in the preceding quarter.Annualized GDP declined at a rate of 0.3%, worse than expectations for an increase of 0.1%.Earlier this week, China’s HSBC services purchasing managers’ index dropped to 50.0 in July from 53.1 in June, right on the 50 mark that separates expansion from contraction, which rattled nerves in energy markets amid fears of supply gluts.

http://www.investing.com/news/commodities-news/crude-falls-despite-upbeat-u.s.-inventory-report-301507

Forex – Euro hits fresh 8-month lows against dollar – Sean Seshadri

The euro fell to fresh eight month lows against the dollar on Tuesday after data showed that U.S. consumer confidence rose to a seven year high this month, underlining the view that the economic recovery is gaining traction.

EUR/USD was down 0.21% to 1.3410, the lowest level since November 21.The pair was likely to find support at 1.3360 and resistance at 1.3443, the session high.The dollar gained ground after the Conference Board reported that its index of consumer confidence rose to 90.9 in July from an upwardly revised 86.4 in June. It was the highest reading since October 2007 and was ahead of expectations for a decline to 85.3.

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Demand for the dollar continued to be underpinned ahead of preliminary data on U.S. second-quarter growth and the Federal Reserve’s latest rate statement, both due on Wednesday. Investors were also awaiting the U.S. nonfarm payrolls report for July on Friday.

Earlier this month Fed Chair Janet Yellen indicated that rates could rise sooner if the recovery in the labor market continued.The euro remained under heavy selling pressure amid concerns over the divergence in monetary policy between the European Central Bank and its major peers.

The euro zone was to release what would be closely watched data on consumer prices on Thursday, amid concerns over persistently low levels of inflation in the currency bloc.The euro was steady against the yen, with EUR/JPY at 136.93, holding above Thursday’s five month lows of 136.35.

http://www.investing.com/news/forex-news/forex—euro-hits-fresh-8-month-lows-against-dollar-298771

Forex – GBP/USD holds steady, near 1-month lows – Sean Seshadri

The pound held steady against the U.S. dollar on Monday, hovering near one-month lows as Friday’s upbeat U.S. data continued to support the greenback and concerns over tensions in the Gaza Strip and Ukraine still weighed.

GBP/USD hit 1.6985 during European morning trade, the session high; the pair subsequently consolidated at 1.6979, inching up 0.02%.Cable was likely to find support at 1.6924, the low of June 18 and resistance at 1.7053, the high of July 24.

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The greenback remained supported by better than expected data on U.S. durable goods orders for June.The Commerce Department on Friday reported a rise of 0.7% in orders of long lasting goods such as machinery and electronic products, compared to forecasts of 0.5%.

The pound showed little reaction to data on Friday confirming that the U.K. economy grew 0.8% in the second quarter of 2014 and expanded by 3.1% on a year-over-year basis.Investors still remained cautious after Hamas Islamist militants in Gaza said on Sunday that they backed a 24-hour humanitarian truce in light of the Muslim holiday Eid al-Fitr.

Meanwhile, the European Union agreed to impose economic sanctions against Russia for its role in the Ukraine crisis. Moscow reacted to the sanctions by warning that they would hamper cooperation on global security issues.

http://www.investing.com/news/forex-news/forex—gbp-usd-holds-steady,-near-1-month-lows-298262