Gold holds near 3-1/2 month high, Trump speech on the radar

Andrew Cummings
March 1, 2017

As a result, the GBP/USD exchange rate starts the new month at 1.2378 having fallen from 1.2587 at the start of the previous month. Cable traded around 1.2430 in today's Asian session. Sterling declined against the dollar on Tuesday as sterling was weighted down ahead of a speech by U.S. President Donald Trump and worries about Britain's future when it leaves the European Union. Platinum shed 0.2 percent at $1,025.80 after scaling a fresh five-month high on Monday at $1,044.10. Investors turned their focus to the United States, where Trump was due to address a joint session of the U.S. Congress.

Trump also did not talk down the dollar by accusing other countries of being currency manipulators. Breadth has been narrow, the advance has been led by "defensive" stocks in areas like utilities and sentiment measures are off-the-charts extreme. In January, the central bank said an interest rate cut was still possible depending on risks, including material consequences if Trump enacts protectionist policies.

In commodities, oil prices inched higher as supply cuts by the Organization of Petroleum Exporting Countries offset concerns about rising US crude inventories.

Spot silver XAG= fell 0.3 percent to $18.29 an ounce, after rising to $18.48, the highest since November 11.

Oil prices, by contrast, dipped modestly as the dollar advanced and traders priced-in the 2.5 million barrel increase for USA crude stocks reported Tuesday by the American Petroleum Institute.


AUD/USD is supported around 0.7662 levels and now trading at 0.7657 levels. Gold retreated from a 3 1/2-month high of $1263.74 hit yesterday. Also out on Wednesday are important ISM manufacturing data and Markit manufacturing PMI reports.

Hong Kong edged up 0.1 percent after a three-day losing streak and Shanghai added 0.3 percent.

US stocks slipped Tuesday afternoon as a disappointing profit outlook from Target dragged down retailers and as investors braced for President Donald Trump's address to Congress.

The headline U.S. durable goods orders data was slightly stronger than expected with a 1.8% January increase, although underlying orders declined 0.2% on the month and the overall market reaction was limited.

"Before Trump's speech, investors were reluctant to fully price in the increased possibilities of a March rate hike".


Benchmark 10-year U.S. Treasury notes were last up 4/32 in price to yield 2.351 percent.

The dollar/yen has also been highly correlated with USA bond yields, with lower Treasury yields on Tuesday helping the Japanese currency. Those yields rose to a session high of 2.345 percent on Monday.

Investors largely showed muted reaction to Trump's speech. It was on track to finish February up around 3.3 percent, marking its second straight monthly rise.

The greenback rose 0.3 percent to 113.16 yen while the euro dropped 0.1 percent against the dollar to $1.0565.


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