18th October 2017

Gold continued to give way on Tuesday, with the same combination of variables pressuring prices lower. To wit, we have yet to see any kind of significant correction in the US stock market as the various indices instead move from record high to record high. On the currency side, the dollar has been particularly strong over the last few days on account of Fed speculation about a more hawkish Chairman. The greenback’s strength took a particularly heavy toll on a host of emerging market currencies, such as the Chinese one in the Turkish lira. In the case of the “majors”, the Euro finished at around 1.1765, while the pound breached the $1.32 level. The Euro was impacted slightly by German ZEW economic sentiment data that fell short of forecast. In addition, focus remains on Spain and the unsettled situation with Catalan. The separatists there have yet to give up the fight and continue to push for a formal break with Madrid despite government admonitions that they desist. For its part, sterling dropped lost ground after comments by Bank of England policymakers were interpreted by investors to be broadly dovish. Finally, the yen ended at about 112.20 by the day’s close against the dollar, but did not relinquish as much ground as some of the others.