Dollar Stays Firm Against Major Rivals

Trading 13 juin 2020 Commentaire »

The U.S. dollar gained in strength against most major currencies on Friday thanks to its safe-haven status amid concerns over second wave of coronavirus infections and worries about global economic growth.

According to a report from John Hopkins University, the number of coronavirus cases across the globe rose to over 7.5 million, while the death toll neared 421,000. The United States continues with the world's highest number of confirmed cases followed by Brazil, Russia, India and the U.K.

As worries mount over second case of infections, U.S. Treasury Secretary Steven Mnuchin dismissed a need for a second shutdown even if new cases accelerate.

A report from the University of Michigan showed a continued rebound in U.S. consumer sentiment in the month of June.

The preliminary report showed the consumer sentiment index for June climbed to 78.6 from 72.3 in May and 71.8 in April. Economists had expected the index to rise 75.0.

The dollar index rose to 97.45 around mid afternoon, moving up gradually from around the flat line, and was last seen at 97.11, up nearly 0.4% from previous close.

The greenback appreciated to an 8-day high of 1.2545 against the pound and a 3-day high of 1.1277 against the euro, after falling to 1.2607 and 1.1316, respectively in early deals. The next possible resistance for the greenback is seen around 1.20 against the pound and 1.10 against the euro.

Against the Euro, the dollar firmed up to $1.1214 but came off that level and dropped to $1.1257 subsequently, but still remained firmly in positive, gaining nearly 0.4%. Data from Eurostat showed industrial output in Eurozone decreased 17.1% on a monthly basis in April, following an 11.9% drop in March. Production was expected to decline 20%. This was the largest monthly fall recorded since the start of the series and bigger than the reductions seen during the global financial crisis.

On a yearly basis, industrial production fell by a record 28% in April after easing 13.5% in March. Economists had expected a 29.5% fall.

The Pound Sterling dropped to $1.2474, but later regained some lost ground, recovering to $1.2531. It had closed at $1.2602 on Thursday. According to data released by the Office for National Statistics, the UK economy contracted in April at the fastest pace since the series began in 1997. The data showed the country's GDP contracted 20.4% in April from March, when it was down 5.8%. GDP was forecast to fall 18.4%. In three months to April, GDP decreased 10.4%, slightly faster than the expected fall of 10%.

Against the Japanese currency, the dollar hit a high of 107.55 yen and later eased to 107.39 yen, still firmly up with a gain of about 0.5% from previous close.

The dollar was a bit weak against the Aussie at 0.6865, after fluctuating between 0.6800 and 0.6912.

The Swiss franc weakened to 0.9520 a dollar, losing ground from 0.9442, while the Loonie firmed up to 1.3584 a dollar, gaining from 1.3629.


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Treasuries Give Back Ground Following Recent Strength

Trading 13 juin 2020 Commentaire »

After moving sharply higher over the past several sessions, treasuries gave back some ground during trading on Friday.

Bond prices fluctuated after an early move to the downside but remained stuck in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.6 basis points to 0.699 percent.

The pullback by treasuries was partly due to profit taking, as bond traders cashed in on the rally seen earlier in the week.

Initial strength on Wall Street also led traders to move money out of bonds, although stocks gave back some ground as the day progressed.

A report from the University of Michigan showing a continued rebound in U.S. consumer sentiment in the month of June also reduced the appeal of bonds.

The preliminary report showed the consumer sentiment index for June climbed to 78.6 from 72.3 in May and 71.8 in April. Economists had expected the index to rise 75.0.

Surveys of Consumers chief economist Richard Curtin said the increase by the index reflected gains in the outlook for personal finances and more favorable prospects for the national economy due to the reopening of the economy.

Meanwhile, a separate report from the Labor Department showed a bigger than expected jump in U.S. import prices in the month of May.

The Labor Department said import prices surged up by 1.0 percent in May after plunging by 2.6 percent in April. Economists had expected import prices to increase by 0.6 percent.

The rebound in import prices came as fuel prices spiked by 20.5 percent in May following the 31.0 percent nosedive in the previous month.

The report also showed a rebound in export prices, which climbed by 0.5 percent in May after tumbling by 3.3 percent in April. Export prices were expected to rise by 0.6 percent.

Next week's trading may be driven by reaction to the latest news on the coronavirus virus, although traders are also likely to keep an eye on reports on retail sales, industrial production, and housing starts.

Federal Reserve Chari Jerome Powell's testimony before the Senate Banking Committee and the House Financial Services Committee is also likely to attract attention.


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Oil Futures Settle Marginally Down

Trading 13 juin 2020 Commentaire »

Crude oil futures settled slightly lower on Friday, and posted their first weekly loss in seven weeks, as uncertainty about energy demand amid worries about global growth outlook weighed on the commodity.

Oil prices moved in a largely narrow range for much of the trading session.

West Texas Intermediate Crude oil futures ended down $0.08 or about 0.2% at $36.26 a barrel.

WTI Crude oil futures lost over 8% in the week, snapping a six-week winning streak.

Brent Crude futures ended lower by $0.18 at $38.73 a barrel today.

With several states in the U.S. reporting a surge in new coronavirus infections post reopening of businesses, concerns about energy demand have resurfaced.

A weak outlook for the U.S. economy from the Federal Reserve, and the recent gloomy forecasts for global economy from the World Bank and OECD contributed significantly to oil's decline this week.

Data showing U.S. crude inventories to have increased to a record 538.1 million barrels weighed as well.

Meanwhile, a report from Baker Hughes said the number of rigs drilling for oil in the U.S. dropped down to 199 this week, falling by 7 from a week earlier. The total active U.S. rig count has dropped by 5 to 279, according to the report.


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Gold Settles Slightly Lower For The Session, Gains More Than 3% In Week

Trading 13 juin 2020 Commentaire »

Gold prices edged lower on Friday as riskier assets such as equities rebounded after Thursday's terrible setback, and the dollar stayed firm for a second successive session.

Bargain hunting, more than any significantly positive news, contributed to the surge in global stock markets today. The yellow metal's fall was just modest as worries about near term economic outlook and fears about another round of coronavirus attack continued to weigh on sentiment.

Weak data on eurozone industrial production and U.K. GDP raised concerns about the economy and contributed to gold's uptick early on in the session.

The dollar index rose to 97.45, gaining about 0.75%

Gold futures ended down $2.50 or 0.1% at $1,737.30 an ounce.

Gold futures gained about 3.2% in the week.

Silver futures for July ended down $0.407 or about 2.3% at $17.482 an ounce, while Copper futures for July ended up $0.0135 or 0.5% at $2.6000 per pound.

According to a report from the University of Michigan, U.S. consumer sentiment improved in June, after nosediving in March and April, and rebounding modestly in May.

The preliminary report showed the consumer sentiment index for June climbed to 78.6 from 72.3 in May and 71.8 in April. Economists had expected the index to rise 75.0.

A report from the Labor Department said U.S. import prices surged up by 1% in May after plunging by 2.6% in April. Economists had expected import prices to increase by 0.6%. The rebound in import prices came as fuel prices spiked by 20.5% in May following the 31% percent nosedive in the previous month.

Excluding the jump in fuel prices, import prices inched up by just 0.1% in May after falling by 0.5% in April.


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