Overnight, the dollar traded higher against a basket of major currencies on Tuesday, after the release of upbeat U.S. trade data, while investors shifted focus to the Trump-Xi meeting. In general, traders have been cautious ahead of the meeting and the potential market implications. In what was a quiet day for top-tier economic data releases, investors welcomed trade data showing that the U.S. trade deficit narrowed by more than expected in February.
- Cable is struggling for direction after losing ground for two consecutive sessions, although it seems to have found decent support around weekly lows near 1.2420 for the time being.
- Oil climbed to a near one-month high on Wednesday on signs of a gradual tightening in global oil inventories and on concerns about a supply outage at a field in the United Kingdom’s North Sea that feeds into an international benchmark price. Prices for Brent crude futures were at $54.46 per barrel up 0.5%. WTI crude futures were up 33 cents, or 0.6% at $51.35 a barrel.
- The euro edged up slightly to $1.0674 after hitting a three-week low of $1.0636 on Tuesday.
- The Australian dollar also crept higher to $0.7564 pulling away from a three-week low of $0.7545 hit in the previous session when investors pared bets that the Reserve Bank of Australia would hike rates this year. Australia’s central bank held rates steady for an eighth month on Tuesday as widely expected, but expressed concerns over soaring property prices and weak employment conditions.
- Higher commodity prices and Moody’s upbeat remarks on New Zealand’s AAA rating and stable outlook helped NZD/USD approach 3-week lows.
- Japanese Yen remains the strongest major currency for the week on risk aversion. On the one hand, sentiments were weighed down by terrorist attack in Russia. On the other hand, markets are getting cautious ahead of the summit between US president Donald Trump and China President Xi Jinping.
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