US Dollar Rises Against All Emerging Market Currencies

US dollar rises against major peers

The US dollar is entering September on positive footing, rising to its highest level since Aua gust 24. The US Dollar Index (DXY), which tracks the buck versus the basket of its main rivals is navigating the area of 95.70/75 or fresh highs.

Currencies including Turkish lira, Argentine peso, Brazilian real, Indian rupee and Indonesian rupiah weakened as investors feared these export-oriented economies would be caught in the middle of an escalating trade conflict.

Political turmoil will likely remain a persistently recurring factor driving financial markets. Events like Brexit negotiations, the ongoing investigations around president Trump, and mid-term elections in November could repeatedly trigger flight into the US dollar.

Canadian dollar weakens to six-week low

Canadian dollar dropped against its U.S. counterpart on Tuesday, due to President Donald Trump’s statement that there is no political necessity to keep Canada in the new NAFTA deal.

The U.S. dollar rose by 0.7 percent to 1.3192 against the loonie on Tuesday, its highest level since July 20. Canada sends about 75 percent of its exports to the U.S., so its economy could be significantly jeopardized if a deal is not reached.

On the other hand, the Australian dollar leaped against its major counterparts in the Asian session, as the RBA put its cash rate on hold.

Gold inches down

The main culprit for the decline in the price of the precious metal is a steadily advancing U.S. dollar, as stronger dollar makes dollar-priced gold more expensive for non U.S. investors.

“As long as the dollar focus remains strong upside potential seems limited (for gold),” said Saxo Bank’s head of commodity strategy Ole Hansen.

Spot gold was down 0.3 percent at $1.196.90 an ounce in the early-day trade, while US gold futures had dropped 0.4 percent at $1.202.10 an ounce. Silver touched a 2-1/2 year low of $14.15 an ounce but was later down 1.7 percent at $14.20. Platinum was down 1.2% at $770, while palladium was down 1.7% at $961.97.