iFOREX Daily Analysis : August 25, 2016
iFOREX | Aug 25, 2016 05:11AM ET
The dollar continues to rise against most major currencies on Wednesday, despite weak U.S. existing home sales, as expectations for further indications on a more aggressive policy increase ahead of Federal Reserve Chair Janet Yellen’s highly anticipated speech on Friday. The U.S. National Association of Realtors said existing home sales decreased by 3.2% in July to 5.39 million units when the forecast was for a 0.4% decline to 5.51 million units. Markets appear nervous as investors wait to see if Yellen will restate the hawkish view of the economy expressed by Fed officials last week. The yen moved lower in the Asian session on Thursday despite corporate services price data showing a higher than expected gain, as the market is cautious ahead of the anticipated Fed comments at the end of the week. For today, the Ifo Institute is to report on German business climate and the U.S. is to release data on jobless claims and durable goods orders. In addition, the Jackson Hole annual meeting of top central bankers and economists starts in Wyoming from Thursday to Saturday.
GBP/USD
The British pound gained against the dollar, reaching three-week highs at $1.3227. Recent reports of surprisingly stronger-than-expected economic data after Britain's vote to leave the European Union have helped in lowering expectations of further Bank of England monetary easing. For today, the U.S. is to release data on jobless claims and durable goods orders, while later in the day, the Jackson Hole annual meeting of top central bankers and economists starts in Wyoming from Thursday to Saturday. Investors will be watching closely for any comments from the president of the Federal Reserve indicating a rate hike in the near future.
Gold
Gold prices dropped to monthly lows on Wednesday, still remaining in a familiar trading range as market players await for the highly anticipated speech from Federal Reserve Chair Janet Yellen at the end of this week. Yellen may give fresh indications on the timing of the next U.S. rate hike at a speech during an annual meeting of central bankers in Jackson Hole, Wyoming, on Friday. The annual Fed symposium has often been used for communicating important policy statements. The meeting starts today and ends on Saturday. For today, gold traders will also be focusing on jobless claims and durable goods orders from the U.S.
Get The News You Want
WTI Oil
Oil prices fell on Wednesday pressured by a bearish inventory report, despite an informal meeting scheduled late next month where major oil producers, led by Saudi Arabia and Russia, will reconsider a collective production freeze in an effort to boost the market. The U.S. Energy Information Administration noted in its weekly report that inventories rose by 2.5 million barrels in the week ended August 19. Market analysts' expected a drop of 0.5 million barrels. Over the past two weeks, crude prices soared almost $10 a barrel, or nearly 25%. Friday’s report by Baker Hughes on active oil rigs count remains in focus for energy traders.
US 500
The main U.S. indices posted sharp losses on Wednesday, remaining close to all-time record-highs amid losses in the Healthcare, Basic Materials and Technology sectors which led shares lower. The worst performers were Newmont Mining Corporation (NYSE:NEM) which was down 7.62% in late trade and Freeport-McMoran Copper & Gold Inc (NYSE:FCX) which lost 7.43%. With earnings season reaching its end, investors are now shifting their focus on data from the U.S. that may have an impact on the strength of the dollar. The main focus is on a highly anticipated speech by Federal Reserve President Janet Yellen starting today, as well as on growth data from the U.S. due on Friday.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.