Dollar Stays Largely Sluggish Against Peers

Trading 17 oct 2020 Commentaire »

The U.S. dollar turned in a sluggish performance on Friday with updates on the stimulus front, retail sales data, surging coronavirus cases and cautious moves by traders ahead of the upcoming elections all playing a role in its movements.

A report from the Commerce Department said retail sales spiked by 1.9% in September after rising by 0.6% in August. Economists had expected retail sales to climb by 0.7%.

Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, jumped by 1.4% in September after dipping by 0.3% in August.

The University of Michigan released a report showing a bigger than expected improvement in consumer sentiment in the month of October. The report said the consumer sentiment index rose to 81.2 in October from the final September reading of 80.4. Economists had expected the index to inch up to 80.5.

On the stimulus front, U.S. Senate Majority Leader Mitch McConnell rejected the push for a larger coronavirus stimulus deal, hours after President Trump told FOX Business he was willing to raise his spending offer above the White House's current $1.8 trillion proposal.

The dollar index, which fell to 93.53 in early U.S. session, recovered to 93.72, but was still down by about 0.15% from previous close.

Against the Euro, the dollar was down marginally at 1.1720

Against Pound Sterling, it was down slightly at 1.2913

The Yen, which moved in a tight band between 1015.19 and 105.49 a dollar, was last seen at 105.40, compared to Thursday's close of 105.45 a dollar.

The Aussie was down 0.23% with the AUD/USD pair trading at 0.7078

The Swiss franc was little changed at 0.9150 a dollar, while the Loonie was at 1.3189 a dollar, down 0.25% from 1.3221 on Thursday.

On the Covid-19 front, new coronavirus infections are surging rapidly in Europe, with several countries seeing steep spikes in new cases.

London will enter a tighter Covid-19 lockdown beginning at midnight today, while a nighttime curfew will take effect in some French cities starting Saturday.

The daily rise in infections surged past 7,000 for the first time ever in Germany, smashing the previous record set just the day before.


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Treasuries Close Modestly Lower Following Early Volatility

Trading 17 oct 2020 Commentaire »

Treasuries showed a lack of direction in morning trading on Friday but saw modest weakness throughout the afternoon.

Bond prices lingered below the unchanged line going into the close of trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.3 basis points to 0.744 percent.

The modestly lower close by treasuries came following the release of a report from the Commerce Department showing much stronger than expected U.S. retail sales growth in the month of September.

A report from the Commerce Department said retail sales spiked by 1.9 percent in September after rising by 0.6 percent in August. Economists had expected retail sales to climb by 0.7 percent.

Excluding a jump in sales by motor vehicles and parts dealers, retail sales still surged up by 1.5 percent in September after climbing by a downwardly revised 0.5 percent in August.

Ex-auto sales were expected to rise by 0.5 percent compared to the 0.7 percent increase originally reported for the previous month.

Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, jumped by 1.4 percent in September after dipping by 0.3 percent in August.

Michael Pearce, Senior U.S. Economist at Capital Economics, said the strong retail sales growth "suggests the economy was carrying more momentum into the fourth quarter than anticipated, defying fears that the expiry of enhanced unemployment benefits in the summer would harm the economy."

Further reducing the appeal of safe havens like bonds, the University of Michigan released a report showing a bigger than expected improvement in consumer sentiment in the month of October.

The preliminary report said the consumer sentiment index rose to 81.2 in October from the final September reading of 80.4. Economists had expected the index to inch up to 80.5.

However, a report from the Federal Reserve showing an unexpected decrease in industrial production in the month of September helped limit the downside for treasuries.

The Fed said industrial production fell by 0.6 percent in September after rising by 0.4 percent in August. The drop surprised economists, who had expected production to increase by 0.5 percent.

Looking ahead to next week, traders are likely to keep an eye on the latest developments in Washington as well as reports on homebuilder confidence, housing starts, and existing home sales.


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Oil Futures Settle Marginally Down

Trading 17 oct 2020 Commentaire »

Crude oil prices rebounded from the session's lows but still ended marginally down on Friday as worries about demand outlook amid the continued surge in coronavirus cases weighed on the commodity.

Several countries across Europe have imposed fresh restrictions to curb the spread of virus infections.

Several states in the U.S. are seeing a surge in new cases and increasing number of hospitalizations over the past few days.

West Texas Intermediate Crude oil futures for November ended down $0.08 or about 0.2% at $40.88 a barrel, recovering from a low of $40.08 touched around mid-morning.

WTI crude oil futures for November gained about 0.7% in the week.

According to a report from Baker Hughes, the U.S. oil-ring count rose for a fourth week in a row, with active-oils count surging up by 12 to 205.

Active drilling-rig count rose by 13 to 282 this week, the report said.

Despite lingering concerns over demand recovery, OPEC and its allies plan to taper the ongoing oil production cuts as of January 2021, as initially agreed.

OPEC's Secretary General Mohammad Barkindo said on the Energy Intellgency Forum on Thursday that keeping market stability is the top priority of the OPEC+ agreement, but added "We have no illusions this recovery will take a long time."

An OPEC+ meeting, scheduled to take place on Nov 30 - Dec 1, will decide on the group's next policy move with regard to production cuts. There is an OPEC+ meeting scheduled for Nov. 30 to Dec. 1 to set policy.


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Gold Futures Settle Slightly Lower

Trading 17 oct 2020 Commentaire »

Gold prices edged lower on Friday and the most active gold futures contracts posted their first weekly loss in three, amid waning stimulus hopes, and stronger equity markets.

The dollar's weakness limited gold's downside. The dollar index, which fell to 93.53 early on in the day, recovered some lost ground subsequently and was last seen hovering around 93.70, down 0.17% from previous close.

Equity markets moved higher amid optimism about a potential coronavirus vaccine from Pfizer.

Gold futures for December ended down $2.50 or about 0.1% at $1,906.40 an ounce.

For the week, gold futures shed nearly 1%, recording their first drop in three weeks.

Silver futures for December ended higher by $0.181 at $24.405 an ounce, while Copper futures for December settled at $3.0675 per pound, down $0.0180 from previous close.

On the stimulus front, U.S. Senate Majority Leader Mitch McConnell rejected the push for higher coronavirus stimulus deal, hours after President Trump told FOX Business he was willing to raise his spending offer above the White House's current $1.8 trillion proposal.

On the Covid-19 front, new coronavirus infections are surging rapidly in Europe, with several countries seeing steep spikes in new cases.

London will enter a tighter Covid-19 lockdown from midnight today, while a nighttime curfew will take effect in some French cities starting Saturday.

The daily rise in infections surged past 7,000 for the first time ever in Germany, smashing the previous record set just the day before.

In U.S. economic news, a report from the Commerce Department said retail sales spiked by 1.9% in September after rising by 0.6% in August. Economists had expected retail sales to climb by 0.7%.

Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, jumped by 1.4% in September after dipping by 0.3% in August.

The University of Michigan released a report showing a bigger than expected improvement in consumer sentiment in the month of October. The report said the consumer sentiment index rose to 81.2 in October from the final September reading of 80.4. Economists had expected the index to inch up to 80.5.


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