Dollar gains broadly especially vs yen on easing of US/Iran tensions after Trump's statement boosts risk sentiment

Market Review - 09/01/2020  00:32GMT  

Dollar gains broadly especially vs yen on easing of US/Iran tensions after Trump's statement boosts risk sentiment

The greenback erased its initial losses against the safe-haven yen and chf after Iran's rocket strikes on a U.S. base in Iraq and ended the day higher against majority of its peers on Wednesday as Trump's statement on Iran boosted risk-on sentiment.  
  
Reuters reported Iran has launched an attack on U.S.-led forces in Iraq, the U.S. military said on Tuesday, adding Tehran fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting U.S.-led coalition personnel.    And U.S. private payrolls surged in December, but the pace of job growth was likely flattered by a seasonal quirk.   The ADP National Employment Report on Wednesday showed private payrolls jumped by 202,000 jobs last month after an upwardly revised 124,000 gain in November.    Economists polled by Reuters had forecast private payrolls advancing 160,000 last month following a previously reported 67,000 rise in November.  
  
Reuters reported U.S. President Donald Trump said on Wednesday there were no American casualties in the Iranian strikes on military bases housing U.S. troops in Iraq and that Tehran appeared to be standing down.   "No Americans were harmed in last night's attack by the Iranian regime. We suffered no casualties," Trump said in a White House address. "Our great American forces are prepared for anything. Iran appears to be standing down."  
  
Versus the Japanese yen, dollar tumbled at Asian open to a 12-week trough at 107.66 on increasing geopolitical tensions after Iran launched rocket attacks on airbase in Iraq hosting U.S. troops, however, price swiftly erased its losses and rallied to 108.45 in Asian morning on short-covering. The pair continued to ratchet higher in Europe and later hit session highs of 109.24 after President Trump made his statement on Iran at the White House.  
  
The single currency rose briefly to 1.1168 on usd's weakness in Asia, however, price erased its gains and tumbled to session lows of 1.1103 in New York on rising U.S. yields and broad-based usd's strength.  
  
The British pound went through a roller-coaster rise on Wednesday as despite initial retreat to 1.3105 at Asian open, price gained to 1.3139 in Asian morning, then ratcheted higher to session highs at 1.3169 in early European morning on cross-buying of sterling especially vs euro. However, cable erased its gains and tumbled to 1.3081 ahead of New York open on usd's strength.  
  
Data to be released on Thursday :  
  
Australia AIG construction index, UK BRC retail sales, RICS housing price balance, Australia trade balance, imports, exports, China PPI, CPI, Germany industrial production, exports, imports, trade balance, current account, Swiss retail sales, Italy unemployment rate, EU unemployment rate, Canada house starts, building permits and U.S. initial jobless claims.