The US Dollar struggled to preserve/build on the early uptick and extended its recent corrective slide from YTD tops, set last Friday, extending its sideways price action, which coupled with nervousness ahead of the next round of US-China trade. The Sterling is alternating gains with losses vs. the dollar on Tuesday and is now prompting GBP/USD to retreat from earlier tops back to 1.2920 after the monthly report on the UK labour market came in below expectations. USD/JPY reversed the early dip to an intraday low level of 110.45 and turned higher for the second consecutive session after the BoJ Governor Haruhiko Kuroda raised the possibility of further policy easing. After a brief adventure to daily highs beyond 1.1320, EUR/USD has now receded to the 1.1300 neighbourhood in the wake of mixed results from the ZEW Survey.
After an eventful EUR macro calendar this morning, with the UK labour market report and Eurozone December construction output data, alongside the German February ZEW survey of current situation, the NA calendar remains light, with no first-tier macro news from the US.
Amid a lack of significant economic releases, the developments around the US-China trade talks will remain the main market driver. Later in the American session, the API weekly crude stocks data will drop in at 21:30 GMT.
WTI trades a bit softer around $55.70 during early Tuesday. The energy benchmark slipped further from fresh 2019 high of $56.30 marked Monday as global investors remain afraid for future fuel demand considering the presently hanging issue of the US-China trade deal. However, OPEC+ supply cuts and the US sanctions on Iran and Venezuela limit the energy benchmark’s downside.
Gold quickly reversed an early dip to $1323 area and turned higher for the fourth consecutive session, hitting near ten-month tops of $1,330 in the last hour. Despite the positive trigger, bulls might struggle to extend the momentum amid the prevalent risk-on mood and growing optimism over a possible resolution of US-China trade conflicts, which tends to dampen the precious metal’s relative safe-haven status. Investors will also look forward to the important release of the latest FOMC meeting minutes on Wednesday, which might provide fresh insights over the central bank’s policy outlook for 2019 and help determine the next leg of a directional move for the non-yielding yellow metal.