Forex Today: Dollar drives higher on fears, ahead of Retail Sales, Powell - FXStreet
Here is what you need to know on Tuesday, August 17:
The market mood has soured amid a fresh Chinese techlash, covid fears and uncertainty ahead of US Retail Sales and Fed Chair Powell's speech later in the day. Antipodean currencies are hit hardest while gold benefits from falling yields and cryptos stabilize.
Risk-off: Markets are suffering yet another "hangover" following record highs on the SP 500 and other US stock indexes. China is moving against "idle culture," a call which is seen as hitting videogames and other activities, as part of its backlash against powerful tech companies. Asian shares are struggling and dragging others lower.
COVD-19 cases continue rising in the US and weigh on the recovery, but the dollar is gaining with safe-haven flows across the board.
Coronavirus is hitting hard antipodean currencies hard. AUD/USD has tumbled below 0.73 after the Reserve Bank of Australia's Meeting Minutes revealed uncertainty about the economy following covid-related lockdowns.
NZD/USD has tumbled by over 1% and below 0.70 after one coronavirus case in Auckland prompted the government to order a snap three-day nationwide lockdown, with longer restrictions in several regions.
GBP/USD is sliding toward 1.38 amid dollar strength and amid mostly upbeat jobs report. The UK Unemployment Rate fell to 4.7% in June and wags are up 8.8% YoY. Jobless claims disappointed with a minor 7.8K drop.
EUR/USD is hovering closer to 1.17 in response to the risk-off mood. Growth is expected to be confirmed at 2% in the second quarter.
US Retail Sales are forecast to show a minor drop in the overall volume of consumption and a minor rise in core measures in July after robust figures in June. Investors are eyeing the impact of rising inflation and the Delta covid variant on shoppers.
US Retail Sales Preview: Dollar booster? Low expectations, market mood point to a clear reaction
Jerome Powell, Chair of the Federal Reserve, is scheduled to speak late in the day and could refer to the timing of the bank's tapering of its bond-buying scheme. Officials at the central bank have been moving to support an announcement as soon as September and both CNBC and the WSJ moved toward such a move. That has also been supporting the greenback.
Gold has been extending its recovery, hitting $1,792 as returns on US Treasuries dropped, making the yieldless precious metal more attractive.
Cryptocurrencies: Bitcoin is trading below $46,000, off the highs, and Ethereum has stabilized around $3,150.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.