Dollar Moves Up as Investors Prep for Fed Chairman’s Speech

24 August, 2018, 07:15 | Author: Corey Lynch
  • Comex Gold

The S&P 500 Index edged lower for a second day as trade-sensitive stocks paced declines, while a rally in tech shares helped mute the benchmark's drop.

President Donald Trump has broken with tradition by criticizing his own pick for Federal Reserve Chairman, Jerome Powell, for raising interest rates. Low-level delegates from China and the US are wrapping up two days of trade talks as the nations hit each other with new levies on $16 billion of goods. So far nothing has come out of trade talks between the US and China - both parties moved ahead with tariffs on $16B worth of goods so the focus shifts to the Federal Reserve's annual economic symposium at Jackson Hole.

Elsewhere, the Mexican peso gained after a White House official suggested a Nafta deal was near. They were trading at 2.8207 percent, compared with Tuesday's close of 2.844 percent. And in the background., investors are left to wonder how the political drama in Washington may impact negotiations. "The fact that there's still discussions going on is good and the fact that both sides are still willing to negotiate is good, but I don't think that there's going to be anything monumental that's going to happen before the midterm elections", Liz Young, senior investment strategist at BNY Mellon Investment Management, said in an interview at Bloomberg's NY headquarters.

"The question we're getting asked now by investors is whether what we see in EM is a sign that something bigger is going wrong in the global economy".

Elsewhere, the British pound fell the most in two weeks after United Kingdom officials warned that Brexit could raise prices.

The Swiss franc gained 0.2 per cent to 1.1380 francs per euro, ending its recent run of losses.

Powell's speech at the annual symposium of central bankers in Jackson Hole Friday could yield little more than a reiteration of points already contained in the FOMC minutes minutes but, equally, it could also see him address the emerging market rout that got underway following the last Fed meeting at the end of July.

Futures on the FTSE China A50 Index rose 0.3 percent.

Emerging-market stocks climbed 0.4 percent, leaving 13-month lows further behind as the dollar's losses helped ease pressure on the index which entered bear territory last week, almost $1 trillion market cap down from its Jan peak.

Shares in Europe rose slightly, with the blue-chip FTSE 100 .FTSE gaining 0.11 percent while the pan-European FTSEurofirst 300 index .FTEU3 closed flat.

The dollar index .DXY fell 0.19 percent and the euro EUR= rose 0.24 percent to $1.1597.

The British pound dipped 0.7 percent to $1.2816.

While the minutes were largely as expected and initially taken as dovish by the market, analysts said dollar bulls had been looking for an excuse to pile back into the greenback after it had lost more than 2 per cent from 14-month highs during its longest losing streak of the year. The dollar weakened a fifth day and the 10-year Treasury yield fell to 2.82 percent after the Fed indicated in meeting minutes a readiness to hike again if the economy stays on track.

Britain's 10-year yield was little changed at 1.276 percent.

USA gold futures GCcv1 for December delivery settled up $3.30 at $1,203.30 per ounce.



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