ICM: Dollar Extends Gains on Strong Economic Data

ICM, the leading London-based FX and CFDs provider, reported that the dollar rose against rivals on Tuesday, supported by emerging market woes and strong economic outlook.

The dollar index which measures the greenback against a basket of major currencies climbed to a two-week high of 95.74 after the release of the manufacturing data. The Institute of Supply Management in the United States reported that the August Manufacturing PMI rose to 61.3, the highest since 2004. The economic data shows the divergence in the economic activity between the United States and other economies. The economic crisis in the emerging markets is leading to more flow of money to the United States which means more dollar demand. As per ICM trading platform, the USDTRY traded at a high of 6.72, and the USDZAR is trading at 15.50, its highest level since June 2016.

The Australian dollar rose to a high of $0.7218 against the United States dollar following better-than-expected GDP figures. The figures showed that the Australian economy grew at its fastest rate in 6 years which supported the Aussie. However, the pair AUDUSD pared gains and is trading at a session low of $0.7170 as the dollar strengthened.

The Canadian dollar tumbled to a six week low against the United States dollar, weighed down by the trade tension between U.S. and Canada. As per ICM trading platform, the pair USDCAD rose from a low of 1.2905 on Thursday to trade at a high of 1.3207 yesterday. The Canadian prime minister said that he was pleased with the NAFTA progress on autos. The United States and Canada will resume trade talks today. On the other hand, market participants will also focus on the outcome of the Bank of Canada meeting.

Metals were on the back-foot as the dollar strengthened. As per ICM trading platform, the gold ounce tumbled to a two-week low of $1190 and the silver ounce traded at a low of $14.01, the lowest since January 2016. The XAU/XAG ratio rose to 84.95, the highest since October 2008.

Oil prices retreated from a multi-week high as the U.S. storm weakened and reduced the threat to producers. As per ICM trading platform, the West Texas Intermediate crude futures tumbled from a seven-week high of $71.36 to settle lower at $69.33, and the Brent futures fell from a three-month high of $79.74 to close lower at $77.76. The American Petroleum Institute will report the weekly U.S. crude oil stock later today.

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