The U.S. Dollar fell for the first time in more than seven days as gold prices went up and demand for harbor assets increased after it was reported that leaders from the Ukraine and Russia agreed to meet. The news came after sources said that Russian tanks were spotted, supposedly carrying more aid entered the Ukraine. With heightened tensions in the region, money market traders sought havens like the Yen. The U.S. Commerce Department revealed that Durable Goods Orders surpassed predictions and jumped an amazing 22.6 percent in July, more than the anticipated 7.5 percent hike. Core Durable Goods Orders, which do not take into account transportation items, dipped 0.8 percent, while economists predicted that they would go up 0.5 percent. Core Durable Goods Orders surged 3 percent in June.
Gold benefitted from the flight from risk and advanced 0.75 percent on the Comex. Contracts for delivery in December reached $1,288.50 a troy ounce during the European trading hours. On Monday, the shiny commodity dipped 0.1 percent and traded at $1,278.90. It's worth mentioning that gold plunged to the lowest level in nine weeks on August 21st when the Federal Reserve hinted at likelihood of a rate hike sooner than planned.
In the Euro region, the President of France, Francois Hollande, fired several key cabinet members. Experts say that his firing of Minister Arnaud Montebourg will only fuel further criticism from those in the Socialist Party who oppose Mr. Hollande's views on austerity. The French President is said to be torn between trying to serve the needs of his country and those of the Euro-Zone. Mr. Hollande is expected to name a new team, while the nation worries about the record high unemployment it's experiencing. The Euro rose against the U.S. Dollar, though its advanced was capped, a day after Germany reported a decline in the Business Climate. The British Pound remained close to where it traded at on Monday after the U.K. issued soft Mortgage Approvals and as the markets opted for safety rather than risk assets.
The Yen benefitted from the nervousness of the markets. It rallied against the U.S. Dollar ahead of the meeting between the presidents of Russia and the Ukraine. And it stayed to the upside before the U.S. published key economic data.
New Zealand issued Trade Balance metrics, revealing that the country sustained a shortfall in July The Australian Dollar also depreciated versus the greenback as iron ore prices spiraled to the downside, hitting a two-month low. The commodity's drop came about because of concerns that current supplies won't keep up with the hike in demand from China.
EUR/USD- Euro Recoups Losses
The EUR/USD inched higher on Tuesday, even as speculators waited for the U.S. to issue positive economic releases, and anticipated the pair's decline. Soft statements by the European Central Bank's President, Mario Draghi at the Wyoming conference continued to weigh on the EURUSD. And while all eyes were on the Presidents of the Ukraine and of Russia, Angela Merkel, Germany's Chancellor said that the meeting won't offer a positive outcome. The EUR/USD resumed its drop after the U.S. announced that the total of Durable Goods Orders went up in July, surpassing forecasts.
GBP/USD- Mortgages Post Below Forecasts
The GBP/USD dipped after the U.K. announced that Mortgage Approvals climbed by 42,000 in July, lower than expected. Analysts believe that the British economy remains fragile and could suffer as a result of an overheated real estate sector. Business Secretary, Vince Cable stated that there's a need to "be realistic" about the U.K.'s economy. He reiterated that the housing sector could pose problems for the economy's recovery, and he compared the British economy to a patient on life support. Mr. Cable criticized the fact that the Bank of England has kept the interest rate low and voiced his opposition to the present monetary policies. The GBP/USD retreated from a five-month low, but hovered close to them.
EUR/JPY- Yen Rallies Before Presidents Met
The EUR/JPY fell upon the announcement of lackluster data out of Germany, and after the German Chancellor reiterated that the Euro monetary bloc's members ought to adhere to austerity measures to revive the economy. A survey on Expectations out of Germany denoted that the numbers were at the same level as they were in May of 2013. Mrs. Merkel congratulated the Spanish government for its fiscal discipline. The Yen remained strong as demand for safety rose in the Forex exchange, while investors monitored the situation between Russia and the Ukraine. In the past week, Haruhiko Kuroda, the Bank of Japan's governor spoke at the Jackson Hole Symposium. In his speech he suggested the possibility of further stimulus.
NZD/USD- New Zealand Posts Shortfall
The NZD/USD plunged on Tuesday after domestic releases out of the South Pacific nation pointed to a shortfall in the Trade Balance. According to the official news, the small country entered into a deficit. The reports showed that this happened due to a decline in exports for the first time in almost one year. The NZD/USD touched a 6-½ month low after the release indicated that the deficit stood at 692 million NZD, after showing a surplus of 247 million in June. Economists were disappointed as they predicted that the numbers would come in with a shortfall of 475 million NZD. Meanwhile, sources say that the Reserve Bank is adhering to the measures implemented last October to contain mortgage approvals in light that the housing market has been growing rather quickly.
Today's Outlook
Today's economic calendar shows that Australia will report on HIA New Home Sales and Building Capital Expenditure. The U.S. will release data on MBA Mortgage Applications. And the Euro region will produce the German Import Price Index and Italy's Consumer Confidence.