China was in the spotlight last week after the unfolding reaction to the prior week’s payroll figures. The outlook was deemed a little shakier after the release of trade data which showed a deeper than anticipated contraction in exports along with the smallest trade balance in six-months. While inflation data reported later in the week showed a rebound in both consumer prices and the first positive producer price print in nearly 4-years, concerns about the outlook remain, with the Yuan falling to its lowest levels against the US dollar in 6-years. However, despite the unevenness of Chinese economic activity, the US dollar continued to gain on the back of rising rate hike speculation. Even though mixed data has been weighing on the outlook, the probability of a December adjustment was enough to drive the US Dollar Index to its highest levels since March, putting renewed pressure on gold prices which briefly fell below $1250.00 per troy ounce before rebounding. The FOMC meeting minutes prominently displayed the increasingly hawkish stance of policymakers, fueling additional upside in the dollar. Meanwhile, the Pound fell to new multi-decade lows versus the dollar while EURUSD slid below 1.1000.
Dollar Winning Streak Continues
Weekly Report - 16/10/2016