Dollar Loses Ground Against Other Major Currencies

Trading 22 fév 2020 Commentaire »

The U.S. dollar was weak against most major currencies on Friday, reacting data showing weak manufacturing and services sector activity in the month of February.

The pound sterling firmed up on encouraging data on UK manufacturing activity, and a stronger than expected expansion in German manufacturing activity pushed up the euro.

Markets were also reacting to reports that showed increasing number of coronavirus infections in Beijing as well as outside China.

According to Chinese health officials, the death toll in China's novel coronavirus has gone up to 2,236 with 118 more deaths reported, mostly from the hard-hit Hubei province.

South Korea declared a "special management zone" around a southeastern city as health authorities reported 52 new cases of the illness, raising the tally in the country to 156.

Existing home sales in the U.S. pulled back in January after jumping in December, according to a report released by the National Association of Realtors on Friday, with existing home sales continuing a fluctuating pattern of monthly increases and declines.

NAR said existing home sales slumped by 1.3% to an annual rate of 5.46 million in January after surging up by 3.9% to a revised rate of 5.53 million in December. Economists had expected existing home sales to tumble by 1.8%.

Despite the monthly decrease, the report noted existing home sales in January were up by 9.6% compared to the same month a year ago.

The IHS Markit US Composite PMI fell to 49.6 in February 2020 from 53.3 in the previous month, pointing to the first month of contraction in the private sector since October 2013.

The IHS Markit US Manufacturing PMI fell to 50.8 in February of 2020 from 51.5 in January, while Services PMI dropped to 49.4 in the month, from 53.4 a month earlier.

The dollar index, which opened flat at 99.87, declined to 99.23 by mid morning, and has been moving in a tight range since then. It was last seen at 99.34, more than 0.5% down from previous close.

Euro area private sector grew for a third straight month and at the fastest pace in six months in February, mainly led by further expansion of the services sector, though there were signs of demand and production being hurt by the coronavirus outbreak in China.

The flash composite purchasing managers' index, or PMI, climbed to 51.6 from 51.3 in January, preliminary survey data from IHS Markit showed.

The flash services PMI rose to a two-month high of 52.8 from 52.5 in January. The flash manufacturing PMI output index climbed to an eight-month high of 48.4 from 48 in January.

Against the Euro, the dollar weakened to $1.0865 before recovering a bit to $1.0847, still down nearly 0.6% from previous close.

Against Pound Sterling, the dollar slipped to $1.2957, losing about 0.6%, after data showed UK manufacturing grew at the fastest pace in 10 months in February, while the services sector expanded at the slowest pace in two months, leading to stable growth of the private sector survey data showed Friday.

The Japanese Yen was stronger by nearly 0.5%, at 111.56 yen a dollar, compared to 112.10 yen a dollar.

The dollar weakened to 0.9783 against Swiss franc. The Aussie-Dollar pair was at 0.6627, up nearly 0.2% from previous close.

Against the Loonie, the dollar was weak at 1.3324, compared to 1.3259 on Thursday. Data from Statistics Canada showed Retail sales in Canada were unchanged in December 2019, following an upwardly revised 1.1% gain in the previous month.

Retail Sales increased 2.4% in December of 2019 over the same month in the previous year.


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Treasuries Extend Upward Move Amid Continued Coronavirus Concerns

Trading 22 fév 2020 Commentaire »

Treasuries showed a significant move to the upside during trading on Friday, extending the notable advance seen in the previous session.

Bond prices gave back some ground after moving sharply higher in early trading but remained firmly positive. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.4 basis points to 1.471 percent.

The continued strength among treasuries came as traders continued to keep a close eye on the latest coronavirus news, with Chinese officials reporting 1,109 new confirmed cases of the coronavirus, up sharply from 349 cases the previous day.

South Korean health authorities also reported 52 new cases of the fast-spreading disease, raising the national tally to 156, while the number of confirmed cases in Japan increased by 23 to 728.

A number of companies have warned about the impact of the coronavirus, with Coca-Cola (KO) forecasting the outbreak will trim 1 to 2 cents per share off its first quarter earnings.

On the U.S. economic front, the National Association of Realtors released a report showing a pullback in existing home sales in the month of January.

NAR said existing home sales slumped by 1.3 percent to an annual rate of 5.46 million in January after surging up by 3.9 percent to a revised rate of 5.53 million in December. Economists had expected existing home sales to tumble by 1.8 percent.

Despite the monthly decrease, the report noted existing home sales in January were up by 9.6 percent compared to the same month a year ago.

Coronavirus news is likely to remain in the spotlight next week, although traders are also likely to keep an eye on reports on consumer confidence, new home sales, durable goods orders, and personal income and spending.

Bond trading could also be impacted by reaction to the results of the Treasury Department's auctions of two-year, five-year and seven-year notes.


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Oil Futures Settle Lower On Concerns Over Energy Demand Outlook

Trading 22 fév 2020 Commentaire »

Crude oil prices drifted lower on Friday amid concerns about the outlook for energy demand due to the impact of the coronavirus outbreak on the global economy.

Traders also weighed reports suggesting a rift in the crude-production alliance between Saudi Arabia and Russia.

West Texas Intermediate Crude oil futures for April ended down $0.50, or about 0.9%, at $53.38 a barrel.

Despite closing the session on a weak note, WTI crude oil futures recorded a gain of about 2% in the week.

Brent Crude futures declined by about 1.4% to $58.46 a barrel.

On Thursday, WTI crude oil futures for April ended up $0.39, or 0.7%, at $53.88 a barrel, supported by data showing a smaller-than-expected increase in U.S. crude inventories last week.

Reports about resumption of ceasefire talks between forces fighting over Libya's capital helped ease concerns about supply disruptions.

According to a report from Baker Hughes, crude oil rigs in the United States increased to 679 in the week ending February 21 from 678 in the previous week.

The World Health Organization (WHO) said today that there were 76,767 confirmed cases of COVID-19, with the death toll at 2,247. Although the number of new cases in China slowed a bit, a rise in the number of new cases in South Korea has raised concerns.

South Korean health authorities reported 52 new cases of the fast-spreading disease, raising the national tally to 156. Meanwhile, the number of confirmed cases in Japan increased by 23 to 728.


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Gold Futures Settle Sharply Higher On Safe-haven Appeal

Trading 22 fév 2020 Commentaire »

Gold prices rose sharply on Friday, as reports about the rapidly spreading coronavirus outbreak raised concerns about the outlook for the global economy and prompted investors to shun riskier assets and seek the safe haven of the yellow metal.

Weak economic data and rising bond yields too contributed to gold's uptick.

Gold futures for April ended up $28.30, or about 1.8%, at $1,648.80 an ounce, the highest level since mid February 2013.

Gold futures gained about 3.9% in the week, the largest weekly returns since June.

Silver futures for March ended up $0.211 at $18.530 an ounce, while Copper futures for March settled at $2.6080 per pound, gaining $0.0200 for the session.

In economic news, existing home sales in the U.S. pulled back in January after jumping in December, according to a report released by the National Association of Realtors on Friday, with existing home sales continuing a fluctuating pattern of monthly increases and declines.

NAR said existing home sales slumped by 1.3% to an annual rate of 5.46 million in January after surging up by 3.9% to a revised rate of 5.53 million in December. Economists had expected existing home sales to tumble by 1.8%.

Despite the monthly decrease, the report noted existing home sales in January were up by 9.6% compared to the same month a year ago.

The IHS Markit US Composite PMI fell to 49.6 in February 2020 from 53.3 in the previous month, pointing to the first month of contraction in the private sector since October 2013.

The IHS Markit US Manufacturing PMI fell to 50.8 in February of 2020 from 51.5 in January, while Services PMI dropped to 49.4 in the month, from 53.4 a month earlier.

Meanwhile, on the virus front, Chinese officials reported 1,109 new confirmed cases of the coronavirus, up sharply from 349 cases the previous day. Meanwhile, South Korean health authorities also reported 52 new cases of the fast-spreading disease, raising the national tally to 156, while the number of confirmed cases in Japan increased by 23 to 728.


The material has been provided by InstaForex Company - www.instaforex.com