The dollar index, which measures the greenback against a basket of six peers, edged higher to 95.322, trading near a three-week high of 95.373 reached the previous session.
Against the Japanese yen, the dollar rose 0.06 percent to 113.92 yen on Tuesday.
The euo was down 0.06 percent against the greenback at $1.1573 on renewed concerns about Italy’s budget deficit.
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· EUR/USD may retain heavy tone in Europe
The EUR/USD could continue trading in the red in Europe as Italy's fiscal profligacy could invite credit rating downgrade. At press time, the EUR/USD is trading at 1.1570 - down 0.10 percent on the day - having printed a three-week low of 1.1564 yesterday.
The EUR/USD pair extended its decline in the US session to a fresh three-week low of 1.1563, and the intraday technical picture suggests that the decline could continue this Tuesday, as an early attempt to regain the upside was capped by selling interest ahead of the 200 SMA, while the 20 SMA has accelerated its decline, already below the 100 SMA and about to cross below the larger one. Technical indicators in the mentioned chart remain within negative levels with uneven directional strength, anyway favoring a downward extension toward the 1.1500/10 price zone, a major static support area.
· Gold Q4 Forecast: Gold Selloff Likely to Continue as Fed Proceeds with Rate Hikes
Faith in the Federal Reserve’s commitment to raising rates has thus continued to weigh down gold prices. Investors are heeding the Fed’s guidance and appear to base their strategy around the framework of a firmly hawkish monetary agenda. Barring an economic collapse that forces the Fed to reverse course, gold is likely to continue its downward trend throughout the fourth quarter.
July 2018 looks to have been a decisive month for spot gold prices. The selloff is now struggling to sustain momentum at the $1,200/oz figure, a previously significant inflection point. However, prices would need to reclaim a foothold above $1,300/oz and probably breach range resistance in the $1,357-75 area to invalidate the overall bearish bias.
· North Korea said on Tuesday that declaring the end of the 1950-53 Korean War “can never be a bargaining chip” for getting North Korea denuclearised, and said the country “will not particularly hope for it” if the United States does not want the end of war, according to state media KCNA.
· Greece could be about to start another fight with its creditors and the financial markets.
The government unveiled last evening the first draft of its 2019 budget plan in which two scenarios were put forward for its spending plans and economic targets for the coming year.
One of them included planned and pre-legislated pension cuts, in line with its creditors' expectations.
The other spending plan does not include pension cuts, however, indicating that the Greek government is willing to make changes to reforms that it had previously agreed with its creditors.
The pension cuts were due to start in January and were one of the most difficult reforms to come to an agreement. Potential changes to pensions, or to other reforms, could spark confrontations with European institutions and the International Monetary Fund (IMF). The IMF said last month that the 2019 pension cuts are part of the reforms that the Greek government agreed to, and that Greece needs to show it is investor-friendly.
· While the Trump administration takes a victory lap in the wake of the new trade agreement with Canada and Mexico, relations between the U.S. and China, the world's second-largest economy, continue to intensify.
In the latest sign of the increasingly fraught ties, the Pentagon has canceled Defense Secretary James Mattis' visit to China later this month, said a U.S. defense official, who spoke on condition of anonymity.
For security purposes, the Pentagon does not discuss upcoming travel for the Defense secretary, which is why the visit to China, which was slated for mid-October, was unannounced. The cancellation comes on the heels of a denied port visit for the USS Wasp in Hong Kong and a scrubbed engagement with China's top naval commander.
· Ayako Sera, market economist at Sumitomo Mitsui Trust Bank, said the U.S trade representative “was occupied solving the problem in relation to NAFTA up until now”.
“Japan and the United States can really kick off their trade negotiations now that has ended,” she said.
U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe agreed on Sept. 27 to start fresh trade talks.
· China expressed anger on Tuesday after a U.S. Navy destroyer sailed near islands claimed by Beijing in the disputed South China Sea, saying it resolutely opposed an operation that it called a threat to its sovereignty.
· British Prime Minister Theresa May said on Tuesday she is preparing to make a new offer to the European Union aimed at breaking the deadlock in the Brexit negotiations.
British Prime Minister Theresa May said she planned to remain in the job “for the long term” as she called on her party to come together and back her plan for Brexit.
· U.S. oil prices hit their highest level since November 2014 on Tuesday and Brent crude was also near a four-year peak reached the previous day, with markets preparing for tighter supply once U.S. sanctions against Iran kick in next month.
U.S. West Texas Intermediate (WTI) crude futures CLc1 marked $75.90 a barrel around 0630 GMT on Tuesday, their strongest since November 2014. WTI has risen around 18 percent since mid-August.
International benchmark Brent crude oil futures LCOc1 were at $85.28 per barrel, up 30 cents, or 0.4 percent, from their last close. That was not far off the $85.45 peak reached in the previous session, the highest since November 2014.
Reference: Reuters,CNBC,DailyFX
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