ICM, the leading London-based FX and CFDs provider, reported that the greenback rebounded slightly from a two-week low as market participants await the trade talks between the United States and China, and the Federal Reserve meeting minutes.
Wall Street finished higher for the fourth straight session on Tuesday where the SPX500 touched a record high during the session as the optimism from US/China trade talks affect the financial markets. However, major US indices faded gains ahead of the closing bell. President Donald Trump said that the US would impose 25% tariffs on cars imported from the European Union. As per ICM trading platform, the Dow Jones Industrial Average gained 0.3% to 25822, SPX500 tested an all-time high of 2873 and settled lower at 2863, and the tech-heavy Nasdaq Composite climbed 0.5% to finish at 7859. The trade talks between China and the United States are set to continue later today where any disappointment could weigh negatively on the stock market.
ICM highlighted that the dollar index which measures the greenback against a basket of major currencies ended lower for the fourth consecutive day weighed down by Trump’s remarks. DXY fell to a two-week low of 95.08, down nearly two percent from its 2018 peak. Major Forex pairs such as the EURUSD and GBPUSD jumped due to the weakness of the US dollar. As per ICM trading platform, both pairs settled higher for the fourth consecutive day with GBPUSD closing at $1.2902 and the EURUSD closing at a two-week high of $1.1571. Dollar traders are waiting for the Federal Reserve meeting minutes to have an insight on the risks to the US economic outlook, inflation expectations, and the path of the Fed Funds Rate. The Federal Reserve and his chairman are being criticized by the President, as he prefers a weaker dollar and a lower interest rate to support the United States economy versus rivals. Trump’s verbal interventions were enough to drive the greenback lower.
Gold prices closed higher for the third consecutive day benefiting from a weaker dollar. As per ICM trading platform, the gold ounce rose to a one-week high of $1197 during the Asian session. On the other hand, the silver ounce remains steady in a tight range between $14.65 and $14.85.
Oil prices surged as the American Petroleum Institute reported a drop in US crude inventories. The weekly US crude oil stock fell by 5.170 million barrels last week to a total of 405.6 million barrels. As per ICM trading platform, the West Texas Intermediate crude futures rose to a high of $66.29 per barrel during the Asian session, and the Brent futures traded at a one-week high of $73.15 per barrel. The Energy Information Administration will report the official inventory numbers later today.