The US Dollar extended its retracement slide from a five-month high set yesterday and was seen as one of the key factors behind the pair's intraday slide of over 40-pips from session tops. Currently trading around mid-0.9900s, the pair seemed unaffected by a goodish pickup in the European equity markets, which tends to dent the Swiss Franc's safe-haven appeal.
The pair was seen building on its overnight modest rebound from sub-1.3400 level and got an additional boost from a follow-through US Dollar profit-taking slide. Further gains, however, remained capped amid reemerging Brexit concerns, which has been a key overhang for the British Pound in the recent past.
The Pound Sterling hit a 1-week peak against the Euro after a brief rally which occurred after an official of the Bank of England commented on the outlook for monetary policy changes, specifically as they relate to interest rate hikes. Gertjan Vlieghe of the Bank of England told members of the British Parliament that, over the next three years, interest rates could rise between 25 and 50 basis points annually.
Oil prices surged higher on Tuesday, boosted by geopolitical concerns in Venezuela and the possibility that the United States could sanction the struggling country. Also pressuring oil prices was the potential for additional production cuts by Iran following a new list of demands released by Washington. Among the demands made by the U.S. were for Iran to cancel its nuclear program and to withdraw from Syria’s civil war. Brent crude futures were up 23 cents per barrel as of 2:01 p.m. HK/SIN, to $79.47 per barrel. U.S. WTI futures were up 27 cents per barrel to $72.52 per barrel.
Gold is trading at around $1288.55 a troy ounce on Monday. In Asia, gold fell from the 1292.00 area to find an intraday floor at 1281.70 in early Europe. The metal then rebounded and is trading now in the 1288.00 area. Both positive news on trade and a strong US Dollar keep gold on the back foot on Monday.