Forex Today: Triple blow downs the dollar, Gold glitters amid US-China tensions

Dhwani Mehta FXStreet

Here is what you need to know on Tuesday, August 18:

Broad-based US dollar weakness remained the main theme in Asia this Tuesday. The downward spiral could likely extend further, in the face of a triple whammy of falling US Treasury yields, doubts about the economic recovery and fiscal deadlock in Washington.

The safe-haven greenback failed to benefit from the mixed action on the Asian equities amid renewed US and Australian tensions with China. US Commerce Department announced on Monday that it will add another 38 Huawei affiliates in 21 countries to the US economic blacklist.

Meanwhile, China’s Commerce Ministry said it began an anti-dumping investigation into imports of wine from Australia. In response, Australian Trade Minister Simon Birmingham said Canberra has been told a second investigation into subsidies could be next.

Within the G10 fx space, EUR/USD challenged the 1.1900 hurdle while USD/JPY dropped to fresh weekly lows near 105.55.

AUD/USD consolidated near-weekly tops of 0.7229, with the upside attempts capped by Australian-China tensions and dovish RBA minutes. Meanwhile, extended border controls in other Australian states also kept the bulls unnerved. NZD/USD dropped below 0.6550 amid a continued rise in the virus cases.

USD/CAD extended the break below 1.3200 despite the weakness in WTI. The US oil retreated from two-week highs and surrendered the $43 mark.

GBP/USD held onto gains above 1.3100 after a spokesman from the UK PM Johnson’s office insisted that the govt will continue to work at ways to “plug the gaps” in the potential deal to be reached in September. The seventh round of Brexit negotiations starts later on Tuesday.

Gold extended the advance and traded just under the $2000 level, having closed above the critical 100-hourly SMA on Monday.

Cryptocurrencies consolidated the upsurge, with Bitcoin trading near $12,300.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD weakens below 1.3250 as UK Prime Minister Keir Starmer resigns

The GBP/USD pair loses ground to near 1.3245 during the early Asian trading hours on Tuesday. Political uncertainty in the United Kingdom continues to weigh on the British Pound against the US Dollar. The preliminary readings of the S&P Global Purchasing Managers Index from both the US and the UK are due later on Tuesday.

EUR/USD moves little amid market caution on ongoing US-Iran talks

EUR/USD steadies after registering modest losses in the previous day, trading around 1.1430 during the Asian hours on Tuesday. The currency pair remains locked in a tight range as traders closely monitor diplomatic developments surrounding ongoing talks between Washington and Tehran in Bürgenstock, Switzerland.

Gold defends $4,100, but for how long?

Gold is back in the red early Tuesday, having faced rejection once again at $4,200. The US Dollar holds at yearly highs amid hawkish Fed outlook, scepticism over US-Iran deal progress. Gold is primed to attack $4,100 as the daily technical setup remains in favor of sellers.

Bitcoin holds steady as ETF outflows decline – DEXE and TIA extend gains

Bitcoin hovers above $64,000 at press time on Tuesday, holding steady after a roughly 4% drop last week. Data shows that institutional outflows are easing, suggesting broader market recovery potential, while DeXe and Celestia have emerged as frontrunners over the last 24 hours.

Are American consumers actually “resilient“?

A common label gets placed upon American buyers: resilient. Just last week, Marianne Lake, the CEO of Consumer and Community Banking — and a member of the JPMorganChase Operating Committee — affirmed this sentiment. While she did note some weariness regarding future inflation’s effect on consumers, she reiterated the common adjective: resilient.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.