ICM, the leading London-based FX and CFDs provider, reported that the dollar was little changed on Tuesday against major peers as the United States and China escalate their trade war.
President Donald Trump announced late on Monday new 10% tariffs on $200 billion dollar worth of Chinese goods. China countered by imposing tariffs on $60 billion of U.S. goods. Trump tweeted that China has been taking advantage of the United States on trade for years and that he knows how to stop this. The greenback served as a safe haven and advanced against riskier currencies during trade tensions. The dollar index which measures the greenback against a basket of major currencies settled at 94.61. On the other hand, market participants will be looking forward towards the FOMC meeting next week in order to grasp hints about the rate patch in the coming year which could affect the dollar performance.
The British pound is hovering near a six-week high against the United States dollar, supported by higher chances of a Brexit deal. British Prime Minister Theresa May said that the United Kingdom and the European Union are close to reaching an orderly withdrawal Brexit agreement. Also, the EU chief negotiator Barnier continues to show optimism about a deal. As per ICM trading platform, the GBPUSD traded at a high of $1.3175, and the EURGBP fell to a six-week low of 0.8865. On the other hand, traders are waiting for the August inflation data where better-than-expected figures could provide additional support to the pound.
The Bank of Japan left the monetary policy unchanged as expected. The bank said that interest rates are likely to remain at current low levels for a longer period, and declared that the Japanese economy is expanding at a moderate pace. As per ICM trading platform, the USDJPY retreated from a two-month high of 112.43 to trade lower at 112.22.
Metals prices are still fluctuating in tight trading range. The gold ounce is trading at $1203 between support of $1187 and resistance of $1214. The silver ounce is trading at $14.20, near the lowest level since January 2016.
Oil prices surged despite the rise in the U.S. stockpile. The American Petroleum Institute reported that the U.S. crude stockpiles rose by 1.250 million barrels last week. However, the fears that the U.S. sanctions on Iran could lower the market supply continue to support the prices. As per ICM trading platform, the West Texas Intermediate settled higher at $69.71 per barrel, and the Brent futures closed at $78.89 per barrel. The Energy Information Administration will report the official crude inventory figures later today.