Risk Off – USD down, Gold Up Ahead of US GDP
XAUUSD, H1
The dollar has traded mostly weaker, showing losses of 0.4% against the Euro, 0.8% to the Swiss Franc, which has been the day’s outperformer, and a 0.2% advance on the Yen. The U.S. currency fared better against Sterling, which corrected some of its recent strong gains against most currencies, and the dollar bloc currencies, which have been under some pressure amid a risk-off backdrop in global markets. News that the Trump-Kim support ended abruptly, without a nuclear deal, was taken as a risk-off cue, weighing Asian equity markets and US index futures. Also in the mix was weaker than expected Chinese manufacturing PMI data, which fell back to 49.2 in February from 49.5 in what is now the third consecutive month at contractionary sub-50.0 levels, and the escalation in tensions between India and Pakistan. Another worry is on the U.S.-China trade front, with U.S. Trade Representative Lighthizer remarking in testimony yesterday that the U.S. issues with China are “too serious” to be resolved with promises from Beijing to purchase more goods.
Commodities too, took the risk-off back drop to rally from overnight lows. Gold rallied from a secure base at 1318.25 to R1 at 1327.25, Silver rose from 15.69 overnight lows to 15.81 and Copper, having spike to 2.9370 ran up to 2.9550 and the 20- period moving average.
All eyes back to Washington DC and the up coming Weekly Jobs and more important Q4 GDP and PCE data.
Author
With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, c
