The dollar fell on Wednesday as British pound and the Euro rose on breakthrough from Brexit talks. The broad-based Dollar weakness remained in today’s session, while emerging market woes are weighing on global economic growth prospects, with Asian shares on Thursday heading for their sixth straight session of losses.
Hopes for a soft-landing Brexit leapt forward yesterday as Germany and the UK both expressed a willingness to drop key requirements from their Brexit negotiations, and hopes of averting a messy exit are on the rise. The Pound gained, pushing the Euro as well, with the Dollar facing residual pressure.
Today’s EUR macro calendar had the German factory orders reported at 06:00 GMT, and no other first-tier economic news while the UK docket remains data-dry. Ahead of the US open, markets will look forward to the US ADP employment change numbers for the month of August, dropping in at 12:15 GMT. At 12:30 GMT, we have parallel releases in the US jobless claims and productivity. All eyes remain on the US ISM non-manufacturing PMI report due at 14:00 GMT that sees a solid improvement in the US services sector activity in the month of August. At the same time, the factory orders will be also up for release.
Oil prices dipped on Thursday as emerging market woes weighed on sentiment, while a deadline neared for a potential new round of U.S. tariffs on another $200 billion of Chinese goods. U.S. sanctions against Iran, however, prevented prices from falling further as they are expected to tighten the market after being implemented from November. U.S. crude stockpiles fell last week as refineries boosted output amid strong consumption, as it is shown by the API data. Later in the American afternoon, the EIA crude stockpiles data will be published at 15:00 GMT.
Gold is flashing green in Asia and is attempting a break above the psychological hurdle, possibly on the back of the losses in the US dollar. Furthermore, the yellow metal is likely taking heart from the rising demand from India, one of the biggest sources of demand for gold, as a result, the metal may remain well bid during the day ahead.