Investors maintained their risk-averse stance during the European trading hours amid fears that North Korea is planning another missile test in the near term, restricting the dollar from recovering. On the other hand, the pound was the best performer ahead of May’s speech later today and as Brexit negotiations were entering their fifth round.
Although optimism on the US economy remained high among investors following Friday’s upbeat readings on wage growth and unemployment rate indicated in the employment report, the dollar edged lower to a four-day low of 93.44 during the session before it edged up to 93.55 afterwards. Against the yen, the greenback remained flat around 112.69, while safe-haven gold was up 0.41% at $1,280.40 per ounce.
In other news, the Turkish foreign ministry called the US on Monday to remove its suspension on visa services arguing that it causes "unnecessary tensions", while the Ministry of Justice said that "trying a Turkish citizen for a crime committed in Turkey is our right". This comes after a Turkish employee working at the US Consulate in Turkey was arrested and accused of holding links with the Fethullah Gulen who was blamed for the unsuccessful military coup in July 2016. The greenback gained 2.74% against the Turkish lira, climbing to 3.7159.
The pound surged by 0.64% to $1.3146 as investors were upbeat on May’s speech at the British Parliament later today. May is expected to highlight the UK government’s willingness to achieve a special partnership with the EU after Brexit and say that the ball is now in the EU court according to an extract released by her office. In response, an EU spokesman argued on Monday that "the ball is entirely in the UK court".
The euro was moving sideways around $1.1731 despite the Catalan foreign affairs chief, Raul Romeva, calling for dialogue with Spain on Monday. However, the Spanish Deputy Prime Minister, Soraya Saenz de Santamaria, argued once again that the Spanish government "will take all necessary measures if Puigdemont declares unilateral independence".
Meanwhile, in Germany, political uncertainty eased after the German Chancellor Angela Merkel said to start separate coalition talks next week with the Greens and the Free Democrats.
In terms of data out of the Eurozone, the Sentix Investor Confidence Index indicated that investors’ economic outlook for the next six months improved unexpectedly in October. The index rose by 1.5 points to a 10-year high of 29.7, exceeding the forecast of 28.5.
In other currencies, the aussie and the kiwi continued weakening, with the aussie being 0.23% down on the day at $0.7751 and the kiwi falling by 0.41% to $0.7063.
In the Gulf of Mexico, oil refineries were restarting their operations after Hurricane Nate forced oil producers to shut their pipelines on Friday, driving oil prices near to one-month low levels. However, comments by the OPEC Secretary general Mohammad Barkido on Monday pushed oil prices higher. Particularly, Barkido argued that "there is a clear evidence that the market is rebalancing", while he also added that growth in US oil output has slowed down compared to the first half of 2017.
WTI crude was up 0.32% on the day at $49.45 per barrel and Brent was 0.13% up at $55.69.
