Following the events in Syria and the Banks Holiday in France, Germany Canada and the US, the markets reflect moderate quietness. In spite of it all, Tom recognizes much potential in the JPY and straight away invests in the currency.
Gold Makes Gains as Investors Watch US on Syria
In the lead up to a potential US military intervention in Syria, investors seeking strong havens for their funds are reportedly flocking to buy up large quantities of gold. The rush to purchase the precious metal is said to have pushed the price up to a three month high. In particular, many hedge funds have increased their bets on gold to their highest levels since January, adding further tension to the market.
Readers are reminded of the looming threat of an American lead involvement in war torn Syria following accusations by the international community that the regime of Bashar al-Assad used chemical weapons against civilian targets. Despite the high level of bellicose rhetoric emanating from the White House over the course of the past week, it is unknown at this point what actions the West will take against Syria and when they may decide to act.
Analysts believe that the price of gold will likely rise over the course of the coming week as speculation over US action grows. That said, investors are advised to be wary of further shifts in the volatile commodity that could serve to upend this current trend.
Australian Reserve Bank to Issue Rate Decision
The Australian central bank is expected to put forth the new set of interest rates for the month of tomorrow, 3 September 2013. At this time, many experts in the field believe that the Reserve Bank is unlikely to make any significant changes to the rate for still struggling Australian economy.
Analysts note that the AUD had had great difficulty in recent weeks, with many investors deciding to short the currency in favor of many of its rivals. While the Aussie enjoyed a slight rise during August, it was promptly shot down again as investors remained wary of the weak currency. Should the Reserve Bank decide to lower rates as some believe that they might be planning, it may serve to further depreciate the AUD in the market.
Traders are advised to proceed with caution with the Aussie as it is likely to fall further both in the lead up and aftermath of the rates announcement.
US to Release Manufacturing Data for August
The influential Institute for Supply Management’s factory index report is set to be issued tomorrow, 3 September, 2013. The report details levels of growth for the month of August in the manufacturing sectors of the US.
At this point, many experts believe that the report may show a slight decline in comparison with the figures for the previous month. Analysts note that the reports for the past few months have been consistently rising, moving the US back into a standing of growth. As such, should the report show that the numbers for August are in fact slightly less than those for the month of July, it may just be a period of leveling off after the previous spike.
Analysts do not believe at this time that the issuance of this report will likely have any major repercussions on the US economy or the value of the USD regarding its trading against rival currency pairs. That said, investors are still advised caution in trading with the American dollar as they proceed with their trading.