08.11 - Gold prices surge, Dollar is looking softer
Global markets are calmer today after reaching record highs in recent sessions. The USD looks a bit softer after a possible delay in U.S. tax reform plans. Gold is gaining strength, benefiting from, the weaker dollar and recent comments by Trump on North Korea that re-ignite tensions between the two nations. Elsewhere, Oil prices are pulling back from recent highs on recent supply data. Here are the most important things to know for today’s trading.
The dollar steadied against other major currencies on Wednesday following reports that a key corporate tax cut currently under discussion in U.S. tax reforms plans could be delayed for one year.
The Washington Post reported on Tuesday that Senate Republican leaders are thinking of postponing the implementation of the major corporate tax cut to comply with Senate rules.
The U.S. dollar had been supported in recent session by hopes the U.S. administration's tax cuts could boost the economy. If enacted, the bill would be the biggest overhaul of the U.S. tax system since the 1980s.
It would also be the first major legislative achievement since Republicans took control of the White House and Congress in January, but doubts remain over the scale of borrowing needed to finance the bill and the timetable for its passage this month.
Gold prices edged higher on Wednesday, as concerns over the implementation of a potential U.S. tax overhaul and especially its timing dampened demand for the dollar.
Meanwhile, safe-haven demand was also boosted by U.S. President Donald Trump's most recent comments on North Korea, saying that the U.S. would defend itself against Pyongyang's nuclear threat.
Markets were also jittery as Saudi Arabia over the weekend launched an anti-corruption purge among the highest levels of the establishment. In a separate event, the Saudi Kingdom accused Iran of being responsible for a ballistic missile attack carried out in Yemen, adding to local geopolitical tensions.
In addition, Lebanese Prime Minister Saad Hariri surprised markets on Saturday by announcing his resignation, citing assassination threats and blaming Iran for interference in Lebanon.
In an address to the South Korean parliament on Wednesday, U.S. President Donald Trump addressed tensions with North Korea, saying that it "has interpreted America's past restraint as weakness."
"This would be a fatal miscalculation. This is a very different administration than the United States has had in the past," he added.
Trump arrived in South Korea on Tuesday after meeting with Japan Prime Minister Shinzo Abe over the weekend.
Donald Trump is the first U.S. president to speak before South Korea's parliament since Bill Clinton in 1993. The U.S. president is scheduled to continue his tour in China later on Wednesday.
Official data from the Energy Information Administration was set to be released later Wednesday, amid forecasts for an oil-stock drop of around 2.8 million barrels, which would mark the second weekly decline in a row.
On Tuesday, the American Petroleum Institute said crude stockpiles declined by 1.6 million barrels in the week ending November 3, disappointing expectations for a drawback of 2.7 million barrels.
Prices were also hit by data showing that China's oil imports dropped to 7.3 million barrels per day (bpd) in October from an almost record-high of 9 bpd the previous month. China is the world's second biggest oil consumer.