iFOREX Daily Analysis : May 17,2017
iFOREX | May 17, 2017 05:14AM ET
The dollar continues to lose ground, reaching six month lows against most major currencies on Tuesday, after mixed economic data and reports that surfaced, showing that President Donald Trump shared sensitive information with Russia at a meeting last week.
Trump turned to twitter on Tuesday to defend his decision to share sensitive information with Russia, insisting that he had “the absolute right” to do so as these “facts” concerned terrorism.
Elsewhere, mixed economic data added further pressure, after U.S. housing data fell below of expectations while industrial production expanded at the fastest pace in more than three years.
In China, the central bank made its biggest one-day cash injection on Tuesday to boost confidence in the markets.
The People’s Bank of China added 170 billion yuan ($24.7 billion) into the financial system via its daily money-market operation, the largest amount since just before the Lunar New Year holiday in January.
For today, the UK is to publish its monthly employment report and the euro zone is to release revised data on consumer price inflation. Canada will be releasing data on manufacturing sales.
EUR/USD
The euro rose to seven-month highs on Tuesday, with EUR/USD approaching levels above 1.11 following reports that U.S. President Donald Trump shared sensitive intelligence with Russia's foreign minister about an Islamic State operation in a meeting last week.
In addition, a solid U.S. industrial production report failed to provide a boost to the dollar as data was offset by a separate report on U.S. housing starts which showed a decrease to the lowest level in five months.
For today, the euro zone is to release revised data on consumer price inflation while in the week ahead, the Philly Fed manufacturing survey will be in focus.
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Gold
Weakness in the dollar continues to boost gold prices on Tuesday, following a mixed batch of U.S. economic reports on industrial production and new housing starts, as the data lowers expectations of a rebound in 2nd quarter U.S. economic growth and also creates doubts on whether the Federal Reserve can hike rates two more times this year.
The precious metal gained additional support by from recent developments on the U.S. political stage as accusations against Trump, dampen expectations for economic policies favoring tax cuts and higher spending.
In the week ahead, gold traders will be shifting their attention towards Thursday’s employment data and on the Philly Fed manufacturing survey.
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