ICM: Dollar Rallies on Upbeat U.S. Economic Data

ICM, the leading London-based FX and CFDs provider, reported that the greenback advanced against major rivals, bolstered by the solid economic data which confirmed that the U.S. economy is robust and outperforming other economies. The U.S. stocks finished higher as the data improved investor’s confidence.

The dollar index which measures the dollar strength against a basket of currencies rose to a two-week high of 95.02. The dollar rally started when the Federal Reserve raised interest rates by 25 basis point on Wednesday. The strong economic indicators provided additional support to the index. The final reading of the second quarter GDP settled at 4.2%, the fastest in four years, the GDP price index rose to 3.3%, and the durable goods orders increased by 4.5%. On the other hand, the concerns about Italy’s budget weighed on the euro and boosted the dollar. As per ICM trading platform, the EURUSD tumbled to a ten-day low of $1.1632. Moreover, the dollar advanced to a nine-month high against the Japanese yen and the pair USDJPY traded at 113.64.

ICM highlighted that the Dow Jones and SPX500 ended a multiday losing streak as data improved confidence and risk appetite. As per ICM trading platform, the Dow Jones Industrial Average gained 0.2% to 26439, the SPX500 added 0.3% to 2914, and the tech-heavy Nasdaq Composite Index rose 0.7% to 8041.

Gold prices tumbled to a one-month low as the dollar strengthened. The gold bullion was able to break out of the trading range and close lower at $1182. Also, the silver ounce settled lower at $14.26.

Oil prices remain supported by the potential impact on supply from the sanctions on Iran’s oil export. The Brent futures are hovering near a four-year high, and the West Texas Intermediate futures are trading near a ten-week high. As per ICM trading platform, the Brent futures settled at $81.28, and the West Texas Intermediate crude futures closed at $72.17. The Kingdom of Saudi Arabia announced that it could increase production by 500 thousand barrels to offset the drop in Iranian production. However, the kingdom might have to reduce its production next year to balance the global supply and demand. The production in the United States is likely to rise by 2.4 million barrels per day in 2019, whereas the global demand could expand by 1.5 million barrels only. Therefore, producers should take actions to avoid excess supply which could lead to a fall in prices.

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