By ICM Capital 

The U.S. dollar recovered yesterday vs. a basket of major currencies after New York Fed President William Dudley said that the U.S. inflation should hike alongside wages, reinforcing expectations for the Fed to keep raising interest rates.

In addition, this is actually a pretty good place to be with unemployment at 4.3% and inflation at about 1.5%. He also said, we are pretty close to full employment and Inflation is a little lower than what we would like, but we think that if the labor market continues to tighten, wages will gradually pick up and with that, inflation will gradually get back to 2%.

  • The U.S. dollar index (DXY), which measures the greenback against a basket of currencies, settled above 97.20 pips.

Gold prices declined yesterday to $1,242, on a strong USD. The precious metal is awaiting new comments from senior monetary policy makers during the day. Technically, positive comments could push the yellow metal to decline further.

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The Sterling pound failed to manage its gains vs. the Greenback as Brexit negotiations started yesterday in a period of heightened political uncertainty. Technically, Cable could trade under pressure due to recent terrorist attacks.

Oil prices declined materially yesterday as investors saw more signs that increasing crude production in Libya, Nigeria and the United States are undermining the efforts by OPEC and other producers to support prices. Meanwhile, U.S. WTI crude fell as much as 54 cents, or 1.2%, to trade at $44.20 per barrel, the lowest close since November 14.

The most important economic events:

  • CHF SNB’s Jordan Speaks in Bern (GMT 08:45) – Important
  • USD Current Account Balance (1Q): (GMT 08:45) – Low – forecast (-$123.8b) – Previous (-$112.4b).

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.