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World First Update

The Australian dollar has resurged from its recent slump overnight, with AUD/USD climbing 1.4% (0.7817 – 0.7926). This can be pinned down to the fact that although iron ore spot markets have been falling (dragged down by continued weakness in steel prices), overnight Chinese futures surged higher and it looks like this losing streak will come to an end today. Whether these gains in iron ore futures were driven by the renewed bout of speculative buying following several days of steep losses remains unclear. The only thing that is certain is that the gains were huge, pointing to the significant likelihood that spot iron ore markets will bounce today and has given the Aussie a chance to breathe. For now…

Trump’s press conference on the events in Charlottesville has not influenced markets. What has driven the US dollar higher recently however is that cooler heads seem to be prevailing in the Korean peninsula and also a significant rise in US retail sales figures, with consumers splurging in the month of July. Amazon’s Prime Day will have helped matters but car dealerships and restaurants also reported sizeable increases. It is too early to say that US data is turning positive but this is a welcome sign. Today’s minutes from the latest Federal Reserve meeting are a dovish risk to this nascent USD strength.

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