Aussie Dollar Weakens

The Australian dollar abated together with the Japanese yen while investors remained focus on the Ukraine and markets in the US and Canada were closed for Labour Day.

The USD/JPY currency pair traded at 104.13. This was an increase of 0.05 percent while the AUD/USD pair changed hands at 0.9334.

The US is working with the EU for to potential sanctions against Russia.

European Council head Herman Van Rompuy commented the bloc will not outline criteria for launching new restrictions. However, he stated that there was resolve to make sure that Russia is penalized for causing more tensions.

In Australia, there is a risk that the manufacturing will tighten barely one month after it expanded to 50.7 within eight months.

Business inventories for the second quarter are due with an expected gain of 0.2 percent followed by the commodity index of Reserve Bank of Australia.

Market stakeholders are also waiting for fiscal policy announcements from the central banks of the United Kingdom, Australia, Japan, and Canada.

Economic Week Ahead

forex tradingThis week’s economic spot is again on the European Central Bank as President Mario Draghi is facing the bank’s fight against the threat of inflation.

There are divided conjectures of analysts on whether the ECB will start its launching measures this month, or just a operated up the big talk. President Draghi awakened expectations that the ECB would initiate its own system of calculable easing after his speech at Jackson Hole this month.

However, some believed it will remained, in particular for ECB has not yet launched its latest package of €400bn that is long-term loans, known as TLTROs.

The Bank of England is assumed to hold its interest rates even if the August’s minutes of the meeting showed that two policymakers have voted to raise rates to from 0.5 pc, from 0.75pc.

Expected to be out this week are the key survey data for the manufacturing, construction and services sector. Meanwhile, the revised official data is expected to show that the UK did not even come close to 2012 double-dip recession.

Asia’s Stocks Rise

Majority of Asian stocks soared following the cut of regional benchmark for its first monthly drop after four months. Investors are assessing whether policy makers in China will provide incentive afters after reports indicated slower growth rates in manufacturing.

Meanwhile, the MXAP or MSCI Asia Pacific Index put in 0.2 percent to 148.19 in Tokyo, Japan with five shares going forward for three that decreased. The gauge plunged 0.6 percent last month which was the first monthly decline since April.

On the other hand, EU member-nations concurred on the imposition of new prohibitions on Moscow in case the dispute in the Ukraine deteriorates. The Union asked the European Commission to give suggestions targeting the energy and finance sectors of Russia.

Many investors think that China may bring in additional stimulus as economic data wanes. However, negative effects to international economy will probably be minimal, according to these market players.

The PMI in China was recorded at 51.1 last month.

China Enterprises Index of mainland shares traded in Hong Kong dropped 0.6 percent after data publication before quashing losses to climb 0.1 percent.

 

Gold Trading Update

gold pricesThe rising tensions in eastern Ukraine have motivated demand for safe-haven towards gold. It offset U.S. data that would have lowered the precious metal.

According to a top Ukrainian military official, a full-scale invasion was taking place in the country with another report that 1,000 Russian troops were in Ukraine to aid the pro-Russian rebels. This news boosted the price of gold considered a safe-haven asset during times of geopolitical uncertainty.

The U.N called for an emergency meeting to address the crisis, which propelled investors to find harbor in the precious metal despite U.S. data that sent gold prices down by encouraging expectations for stiffer U.S. monetary policy.

According to the Commerce Dept., the GPS of U.S. increased at a revised yearly rate of 4.2% for the 2nd quarter of this year, rising from a 4.0 % preliminary estimate and a downward revision to 3.9%. for better than market forecasts.

The numbers firmed the dollar by strengthening expectations that the Fed Reserve in October will end its program of bond-buying and in 2015 will increase its benchmark interest rates possibly sooner than once expected.

It appears that gold and the dollar are traded inversely with one another.

Meanwhile, U.S. Labor Department said that there are declining numbers of individuals filing for jobless benefits in the week ending Aug. 22 by 1,000 to only 298,000 compared to last week’s total of 299,000.