Dollar shows mix performance, Gold hurt by renewed optimism

Dollar shows mix performance, Gold hurt by renewed optimism


The British pound continued to move lower, retreating to levels of 1.3240 dollars per pound. The latest economic news that came from Britain pressed the pound. Data on the business activity index in the UK construction sector showed a slowdown in September to 48.1 points. For the previous month, the indicator reached 50.8 points. The fall in the value of the index below the level of 50 points worried the investors, as a result of which the sales of the British currency continued.

Another major cause of concern was that EU chiefs have warned that Brexit talks are taking too long.

The dollar ended the day with slight declines against most major currencies. Prospects about the upcoming US tax reform, as well as the growing likelihood of a new rise in US interest rates, have supported the price of the US currency over the past three weeks.

“We have seen three consecutive weeks of rallies in the broader dollar index so I do think that markets are squaring up a little bit ahead of a pretty heavy data calendar,” said Mark McCormick, chief currency strategist at TD Securities in Toronto.

However, losses on the dollar remain limited due to growing expectations on the part of market participants that ultimately the Federal Reserve will make another interest rate hike in December. A month ago, only 50% of investors were of the opinion that we would see another interest rate raise. On Tuesday, the dollar index ended trading with a fall of 0.06 percent to 93.42 points. The Japanese yen traded at levels of 112.89 yen per dollar, while the Australian dollar reported a drop to levels around 0.7834. The euro managed to appreciate 0.14%, reaching 1.1747 dollars per euro.

The rising expectations of a new rise in interest rates in the US have led to a fall in the price of gold. Yesterday the noble metal retreated to the lowest levels for the past seven weeks. The metal ended the session at $1,273.40 an ounce, after falling to $1,267.76 earlier in the day. Futures with a delivery term in December closed at $1,274.70. Over the past few months, the rise in net long positions in gold by Comex’s hedge funds has increased nine fold. But the last month saw a sharp decline in the number of newly discovered long positions in the yellow metal. From a technical point of view, the price of gold continues to move in the area around the 100-day moving average to $1,272.00.

Previous articleStrong September Sales: U.S. Auto Market Still On Track For A Record Year
Next articleWhat’s driving the record rises?
I handle much of news coverage for tech stocks, and occasionally cover companies in different sectors. In the past, I've written for other financial sites and published independent investment research, primarily on tech companies. I have a B.A. in Economics from Columbia University. I'm based out of San Diego, but grew up in Southern New Jersey. I play basketball and tennis in my spare time, am a long-time (and long-suffering) fan of Philadelphia's sports teams, and alternate daily between using an iPad Air, a Galaxy Note 3, and one or two Windows PCs.