The euro edged down on Tuesday as the euro zone economy showed more signs of slowing. The greenback edged higher despite growing bets the U.S. central bank will pause its rate hike cycle.
A fall in German industrial output for the third straight month, which was not expected, helped to weaken the euro. The drop was modest but underscored concerns about a slowdown. Further, the European Central Bank tries to wean the region off stimulus. The ECB has said it plans to leave rates unchanged through the summer of 2019.
German exporters are struggling with weaker global demand and trade disputes driven by U.S. President Donald Trump’s policies.
The euro edged down 0.2% to $1.1463. It has traded in a tight range of $1.12 to $1.15 since mid-November.
Weakness in the euro supported the dollar, which rose 0.1% against a basket of currencies to 95.734 . The dollar index has lost around 2% since mid-December. It remains near a three-month low of 95.638 reached on Monday.
Federal Reserve Chairman said on Friday the Fed is not on a preset path of rate hikes. He added that it will be sensitive to the downside risks markets are pricing in.
START TRADINGForex – Commodities – Euro edged down on signs of slowing economy
The Australian dollar was lower by 0.1% at $0.7123. Despite its weakness on Tuesday, traders remain positive on the Aussie dollar for now. Sentiment has been buoyed by aggressive stimulus measures in China and by improved prospects for a U.S.-Sino trade deal. China is the largest importer of Australian commodities.
Sterling hovered near a one-week high on Tuesday. Britain’s parliament prepared for a debate on Prime Minister Theresa May’s Brexit withdrawal agreement ahead of next week’s vote. The British currency traded at $1.2773. Traders expect sterling to remain volatile over the next few weeks as Brexit approaches.
Against the euro the pound rose 0.2 percent to 89.67 pence per euro.
Mixed signs on the momentum in Britain’s economy continue to be overshadowed by investors angst about the sort of Brexit.
Oil prices rose on Tuesday, supported by hopes that talks in Beijing between U.S. and Chinese officials might defuse their trade dispute. OPEC-led supply cuts also tightened markets.
Brent crude futures gained 69 cents, or 1.22%, to $58.02 per barrel by 1325 GMT. U.S. West Texas Intermediate (WTI) crude oil futures climbed 59 cents, 1.22%, to $49.11 per barrel.
Gold prices edge lower toward $1280 as DXY extends rebound. The XAU/USD pair came under a renewed selling pressure in the early NA session as the dollar continued to gather strength.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.