Dollar Rebounds, Firms Up Against Peers

Trading 23 Jan 2021 Commentaire »

The U.S. Dollar firmed up against most of its peers on Friday, as worries about growth amid continued surge in coronavirus cases and tighter lockdown restrictions in several countries lifted the currency's safe-haven appeal.

The dollar's strength was also due to possibility of Joe Biden's aid package failing to get the approval of the Senate Republicans.

On the economic front, a report from the National Association of Realtors showed an unexpected rebound in existing home sales in the month of December.

NAR said existing home sales climbed by 0.7% to an annual rate of 6.76 million in December after tumbling by 2.2% to a revised rate of 6.71 million in November.

The rebound surprised economists, who had expected existing home sales to slump by 2.1% to a rate of 6.55 million from the 6.69 million originally reported for the previous month.

The dollar index rose to 90.31 from a low of 90.05 it touched in the Asian session, was at 90.22 a little while ago, gaining about 0.1%.

Against the Euro, the dollar was down slightly at $1.2172 recovering from an early low of $1.2190. Better-than-expected German PMI data supported the Euro.

The Pound Sterling was weak against the dollar, fetching $1.2684 a unit, after having closed at $1.3731 on Thursday. Weak U.K. retail sales and PMI data, as well as concerns over the looming border closure to prevent the spread of new coronavirus variant weighed on the British currency.

The Yen was down at 103.76 a dollar, compared with 103.49 a dollar Thursday evening.

The Aussie was weak against the dollar at U.S$ 0.7714, as against US$ 0.7764. Data from the Australian Bureau of Statistics showed that Australia's retail sales tumbled a seasonally adjusted 4.2% on month in December - coming in at A$30.324 billion. That missed expectations for a decline of 2.5% following the 7.1% jump in November.

The Swiss franc was flat 0.8855 a dollar, while the Loonie was at 1.2733 a dollar, giving up about 0.75%. data from Statistics Canada showed retail sales in Canada increased by 1.3% month-over-month in November of 2020, beating market forecasts for a rise of 0.1%. Compared to sales in November 2019, retail Sales increased 7.5% percent in November 2020.


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Treasuries Move Higher Amid Uncertainty About Relief Package

Trading 23 Jan 2021 Commentaire »

After ending the previous session modestly lower, treasuries moved back to the upside during the trading day on Friday.

Bond prices moved higher early in the session and remained positive throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slipped 1.8 basis points at 1.091 percent.

Treasuries benefited from their appeal as a safe haven amid uncertainty about President Joe Biden's proposed $1.9 trillion coronavirus relief package.

Moderate Republican Senators Mitt Romney and Lisa Murkowski have both expressed skepticism about more stimulus.

Romney and Murkowski both pointed to the recently approved $900 billion stimulus and raised questions about whether more relief is needed.

Democrats could attempt to pass a new stimulus bill without Republican support by the so-called reconciliation process, which only requires a majority.

However, Democratic Senator Joe Manchin has also expressed concerns about the cost of increasing the size of direct payments to individuals to $2,000 from $600.

Traders largely shrugged off a report from the National Association of Realtors showing an unexpected rebound in existing home sales in the month of December.

NAR said existing home sales climbed by 0.7 percent to an annual rate of 6.76 million in December after tumbling by 2.2 percent to a revised rate of 6.71 million in November.

The rebound surprised economists, who had expected existing home sales to slump by 2.1 percent to a rate of 6.55 million from the 6.69 million originally reported for the previous month.

With the unexpected monthly increase, existing home sales in December were up by 22.2 percent compared to the same month a year ago.

"Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic," said Lawrence Yun, NAR's chief economist.

He added, "What's even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market."

The Federal Reserve's monetary policy decision may attract attention next week along with reports on consumer confidence, durable goods orders, new home sales, and personal income and spending.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auctions of two-year, five-year and seven-year notes.


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Oil Futures Settle Sharply Lower As Crude Inventories Rise

Trading 23 Jan 2021 Commentaire »

Crude oil prices slid on Friday after data showed a notable rise in U.S. crude inventories in the week ended January 15, and rising coronavirus cases and lockdown measures in several places raised concerns about outlook for energy demand.

West Texas Intermediate Crude oil futures ended lower by $0.86 or about 1.6% at $52.27 a barrel. Gold futures shed about 0.2% in the week.

Data released by the Energy Information Administration (EIA) this morning showed crude oil stockpiles increased by 4.4 million barrels last week, after falling by 3.2 million barrels a week earlier.

The EIA report said gasoline inventory fell by 300,000 barrels last week, compared to a 4.4 million barrel build in the previous week.

Gasoline production averaged 8.9 million bpd last week, which compared with 7.5 million bpd in the first week of January, the data showed.

According to a report from Baker Hughes, the number of active U.S. rigs drilling for oil rose for a ninth straight week, increasing by 2 to 289 this week.

The total active U.S. rig count, which includes those drilling for natural gas, rose by 5 to 378, Baker Hughes said.


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Gold Futures Settle Lower

Trading 23 Jan 2021 Commentaire »

Gold prices drifted lower on Friday as the dollar gained in strength, rebounding from recent losses. Higher bond yields too weighed on gold prices.

However, continued optimism about further stimulus from Joe Biden administration supported the bullion and limited its downside.

The dollar index, which fell to 90.05 in the Asian session, emerged into positive territory swiftly, and stayed mostly higher as the session progressed. It was last seen at 90.20, up 0.08% from previous close.

Gold futures for February ended down $9.70 or about 0.5% at $1,856.20 an ounce. Gold futures gained about 1.4% in the week.

Silver futures for March ended down $0.298 at $25.556 an ounce, while Copper futures for March settled at $3.6260 per pound, down $0.0215 from previous close.

In economic news, a report released by the National Association of Realtors showed existing home sales in the U.S. unexpectedly rebounded in the month of December, climbing by 0.7% to an annual rate of 6.76 million. In November, home sales had tumbled by 2.2% to a revised rate of 6.71 million.

The rebound surprised economists, who had expected existing home sales to slump by 2.1% to a rate of 6.55 million from the 6.69 million originally reported for the previous month.


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