Dollar Rally Fizzles as Market Speculates Over Trump’s Fed Choice. The dollar stepped back from a 1 1/2-month high against a basket of currencies on Wednesday, as the rally triggered by strong U.S. data fizzled on speculation U.S. President Donald Trump’s choice for the next Fed Chair may be a less hawkish candidate than previously thought. The dollar had rallied earlier this week on speculation Warsh may be the leading candidate to replace Yellen, but was capped after Politico reported that U.S. Treasury Secretary Steven Mnuchin favours Fed governor Jerome Powell. The dollar index stood at 93.57, off a 1 1/2-month high 93.92.
Sterling Dragged Further Down by FPC Minutes. Sterling carried on with its slide from the previous trading session, when it dropped to $1.3222, its lowest in almost three weeks after data showing a surprise contraction in the construction sector stoked worries about economic uncertainty surrounding Britain’s exit from the European Union. Also adding to a sense of uncertainty, Brexit minister David Davis said on Tuesday that Britain is ready to walk away with no deal, and that officials were “contingency planning” to make sure all scenarios were covered. The currency stood at $1.3259, down 1.0 percent so far this week.
Aussie Rallied on Dollar Weakness. The Australian dollar bounced back a tad after hitting a three-month low on Tuesday after the central bank cautioned that a higher currency would drag on the economy and inflation. The Aussie fetched $0.7850, up 0.2 percent on the day and off Tuesday’s low of $0.7785.
Gold Prices Recover from Seven Week Lows. Gold prices have risen above a seven-week low as the US dollar came off its highs. Bullion was pressured earlier by strong US economic data that reinforced expectations of another US interest rate hike this year and pushed the dollar and US bond yields higher.
Oil Prices Dip on Profit-Taking and U.S. Production Fears. Oil prices dipped on Tuesday as speculators took profits for a second day after big third-quarter gains and on concerns that higher prices might spur increased U.S. shale production. Brent crude futures closed down 0.2 percent to $56.00 a barrel, having lost almost 2.5 percent on Monday. U.S. crude fell 0.3 percent to $50.42.
Watch Out Today for:
07:00 am GMT: EUR Non-monetary policy’s ECB meeting
17:15 pm GMT: EUR ECB President Draghi’s Speech
19:15 pm GMT: USD Fed’s Yellen Speech
