US stock market is stuck. Indicators show no dynamic

Trading 20 Fév 2021 Commentaire »

analytics6030e04034f99.jpg

Yesterday, at the end of the trading day, the US stock indices were not showing any significant dynamic. Indices almost remained the same. It is a good sign as earlier they slumped, influencing their colleagues across the ocean.

Nevertheless, there were some external factors that supported securities. Thus, Janet Yellen announced that it was necessary to expand the financial stimulus program even more. She also added that the package proposed by US President Joe Biden should be adopted as soon as possible. Joe Biden's support program is worth $1.9 trillion. However, experts suppose that the project will be under consideration for two weeks.

Janet Yellen pinpointed that the US economy was gradually getting back on track after the virus-induced crisis. It is very important to take decisions on stimulus measures as they may boost the recovery process.

According to the recent data provided by the US Labor Department, in January the US unemployment rate doubled compared to the level logged before the pandemic. At the moment, the indicator is at the level of 6.3%. However, experts suppose that the real figure is 10%. This difference was caused by the fact that many of those who lost their jobs, did not have time to get on the labor exchange, or they are in no hurry to register there.

Composite PMI is another very important indicator. In February, the US composite PMI advanced to 58.8 points from 58.7 points. The rise is not big. However, at the moment, the positive tendency is more important than figures. Moreover, the growth rate is the biggest in the last four years.

At the same time, the US manufacturing PMI declined to 58.5 points from the level of 59.2 points. The final data met the forecast.

The US services PMI inched up to 58.9 points from 58.3 points. It is a really good performance for the most damaged sector. Economists had expected a decline to 57.6 points.

Yesterday, the Dow Jones Industrial Average closed almost at the same level. It just inched up by 0.98 points to 31,494.32 points.

Standard & Poor's 500 dropped by 0.19% or 7.26 points to settle at 3,906.71 points.

NASDAQ Composite jumped by 0.07% or 9.11 points to 13,874.46 points.

During the week, S&P 500 lost 0.71% whereas NASDAQ Composite dropped by 1,57%. At the same time, the Dow Jones Industrial Average added 0.11%.

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

Trading plan for GBP/USD for week of February 22-26. New COT (Commitments of Traders) report. Level of 40 hit with no effort.

Trading 20 Fév 2021 Commentaire »

GBP/USD 24H chart

analytics6030c42c77c4c.jpg

At the end of the trading week, GBP/USD continued its steady uptrend and advanced by another 160 pips. Traders keep buying the pound sterling despite all the uncertainties in the UK. The pair bulls managed to send the price to the level of 40 without much effort and with no signs of an upcoming correction. The next upward target is seen at the resistance level of 1.4129 which is the last one for the month of February. We would like to note the unusual nature of the current movement. First, there have been no pullbacks in the past few weeks. We have already compared the trajectories of the euro/dollar and the pound/dollar pairs. As a rule, the two pairs move in almost the same direction if they are influenced by global fundamental factors. The pound sterling, on the other hand, was first swinging in high-volatility mode. Then, the volatility decreased, and the pair is simply moving upwards without any pullbacks. The euro was going through a correction throughout January, while the pound sterling avoided this stage.

Secondly, it is hard to say exactly what drives the pound. The UK currency has been under pressure for all four years of Brexit. What could be the possible reason to send the pound rallying in recent months? Obviously, the Brexit problems have not been resolved. Is the British economy recovering faster than the American one? It is not. Over the past 11 months, the British currency has moved up by 26 cents. This is a very strong movement given that the injection of huge amounts of money into the US economy seems the only possible reason for it. However, even this factor is not enough to explain the extremely high demand for the pound. Thus, we are inclined to believe that the pair is influenced mainly by a speculative factor. The sterling is becoming more expensive simply because more and more traders are joining the trend, trying to gain on it.

COT report

analytics6030c4370cabb.jpg

For the trading week of February 9-15, GBP/USD advanced by 160 pips. In the previous weekly review, we said that the pound was gradually rising and was not rushing to the upside. Now, however, we can say that it is rapidly moving upwards. The latest COT report for GBP was more or less neutral. Yet, we could still notice the prevalence of the bullish sentiment. The first indicator on the chart clearly shows how the green and red lines have been moving away from each other in recent weeks. Over the last reporting week (the COT report comes out with a three-day delay), the non-commercial group of traders opened 369 long contracts and closed 3,300 short contracts.

Thus, the net positions of non-commercial traders have increased by almost 4,000. Consequently, the market sentiment has become even more bullish. In total, professional traders have 62,000 long contracts and 36,000 short contracts open. So, there is one and a half difference between the numbers of contracts recorded in recent weeks. In comparison, the difference is almost three times between the numbers of long and short contracts for the euro/dollar pair. At the same time, its upward movement is much weaker. Thus, even the COT report proves that such a strong bullish trend on the pound is unjustified. Nevertheless, the uptrend persists, and you should continue to trade upwards.

During the week, there was no important fundamental news in the UK. Neither Boris Johnson nor Rishi Sunak or Andrew Bailey made any statements. All the attention was focused on the coronavirus and the labor market that has been a great cause for concern lately. On the coronavirus front, the situation is rather controversial. On the one hand, the number of daily recorded cases has decreased from 70,000 to 12 - 13,000, according to the data from Johns Hopkins Institute. This is definitely great news. Also, about 15 million UK citizens have already been vaccinated. This makes the UK a leading country in terms of vaccination progress.

On the other hand, several new strains of coronavirus were discovered in the UK in 2021 alone. These new types of the virus are said to be much more contagious, deadly, and resistant to existing vaccines. Against this backdrop, the future development of the coronavirus spread is very unclear. The UK may have to announce the fourth lockdown in 2021. As for the labor market, the government programs to support businesses will end in March. So, private entrepreneurs have already warned about a wave of layoffs unless the government comes up with new financial aid. Therefore, Boris Johnson and Rishi Sunak will need to launch new support programs in March. Otherwise, the unemployment rate will soar and the UK economy will collapse.

Trading plan for the week of February 22 - 26:

1) The pound/dollar pair maintains an upward momentum without much effort. On the 24-hour timeframe, the key targets remain at the resistance of 1.3943 and 1.4129, as well as the level of 1.4129, which can be reached in the near future. We still do not recommend counting on the trend reversal. The fact that the pound has been rising for so long and is already overbought is not enough to start selling amid a strong uptrend.

2) Bears are still extremely weak, while bulls are holding control over the market. Recently, bears have been so weak that they were unable to develop a correction. On H24, there is not a single sign of a bearish trade. You can consider going short on H1 and H4 timeframes when a downtrend is being formed. However, you need to be very careful. If the price consolidates below the Kijun-sen line on H24, you can consider opening short positions in small volumes with the target at 1.3513.

Notes for the pictures:

The resistance/support levels are the target levels when opening long/short positions. You can place take profit levels next to them.

Indicators Ishimoku, Bollinger bands, MACD

Areas of support and resistance are the ones from where the price has rebounded or has been rejected a few times.

Indicator 1 in the COT charts is a size of net positions for each category of traders.

Indicator 2 in the COT charts is a size of net positions for the non-commercial group.

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

Coronavirus retreats. Optimism concerning euro rises. Outlook for EUR/USD on February 20, 2021

Trading 20 Fév 2021 Commentaire »

analytics6030c03c4adc0.jpg

The coronavirus statistical data is fixed at the levels that are two times below the record highs.

Thus, the global number of confirmed virus cases is 400 thousand a day. In particular, in the US the daily rise totals 80 thousand.

Death toll is approximately 2% from the number of infected people.

Importantly, a lower number of new cases leads to higher quality of patient care and treatment.

Vaccination programs: COVID-19 vaccine rollout is rather slow. The situation is a bit better in the US. About 14% of citizens are already vaccinated.

In Russia, the vaccine rollout is very slow. Even in Moscow, where the local authorities are actively stimulating the vaccination program, only 10% have received their doses. In general, in Russia, only 3% of people are vaccinated.

analytics6030c143c3fcf.jpg

EUR/USD chart at the end of the trading week

The euro is likely to go on gaining in value. There is a new level to open buy positions.

Buy positions could be opened from 1.2170 with Stop Loss – at 1.2080.

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

Tough times ahead: oil to face pressure

Trading 20 Fév 2021 Commentaire »

analytics6030be865d184.jpg

At the end of the trading week, oil prices fell noticeably. Many analysts voiced concerns about the future prospects of the oil market after such a considerable decline.

On the trading floor in London, Brent futures for April were lower by 1.6%, or $1.02, moving down to the level of $62.91 per barrel.

On the electronic trading platform in New York, WTI futures for March sank even more by 2.1%, or $1.28. They are trading at $59.24 per barrel. WTF futures for April are now trading more actively, but even their value has significantly decreased. The drop was 2.1%, or $1.27, and the price amounted to $59.26 per barrel.

When summing up the results of the entire trading week, it becomes clear that even the most popular futures for WTI crude oil were below their previous level by 0.4%. However, Brent futures contract has not yet fallen to such a negative level. On the contrary, it showed a weekly growth of 0.8%. The most pleasant thing in this situation is that Brent has been soaring for the fifth week in a row. Additionally, Brent oil has been able to reach its highest level in the last thirteen months.

The oil market is primarily under pressure due to the events in America. Severe frosts caused a reduction in oil production by about 4 million barrels per day. Reportedly, the oil production in Texas is almost completely restored after severe frosts, which forced producers to temporarily shut down the production. The problem was related to the electricity supply, which had been resumed from the local grid, as well as through the use of generators. Therefore, the shale deposits have started working again. The pressure on the market has increased again. The amount of supply will go up again, while demand is not too volatile yet.

Nevertheless, experts try to calm down investors, arguing that the full recovery of the fields in Texas will take quite a long period of time, but the companies themselves engaged in production, hope to speed up the whole production and achieve the previous level in the coming days. Apparently, investors should be cautious.

Analysts warn that the situation in Texas oil is now of great importance for the market. Traders are sure to factor it in in the coming days, which may change the short-term forecast for the oil market.

The potential growth in hydrocarbon production on the territory of OPEC countries also adds fuel to the fire. Earlier, Saudi Arabia, Iran, Venezuela, etc., which previously announced an additional reduction in oil output, now intend to start increasing it. Of course, this will not happen immediately, the pace will not be rapid. Yet, in the medium and long term, it may adversely affect the market.

Moreover, tensions between the United States and Iran seem to have come to an end, which is bearish for the market. The new US president expressed his intention to end the conflict that the previous president had started and to establish a friendly tone of communication. Thus, the US may lift sanctions on the Iranian oil industry, which means that the supply of hydrocarbons will only soar. It may also significantly change the balance of power.

However, so far, oil prices managed to rise again to the record values. It has not happened for more than a year. Yet, this rally may be short-lived. So, investors need to be more careful.

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

Trading plan for EUR/USD for week February 22 – 26. New COT (Commitments of Traders) report. Slow trading, but markets remain

Trading 20 Fév 2021 Commentaire »

EUR/USD 24H chart

analytics6030b4f6cd494.jpg

Another trading week has come to an end without giving any clarity to the situation. On the one hand, traders still have a rebound signal from the Senkou Span B line on the 24-hour timeframe. Another signal comes from the 50.0% Fibonacci level which is extended along the upward section that has been there for two months. Thus, there is every reason to expect further upward movement. However, this week, the pair declined first to rise later and fished the week at the opening levels. Also, the price remained inside the Ichimoku cloud which is usually not a favorable sign for an uptrend. The Ichimoku cloud often indicates a flat movement although now there is no clear sideways channel. We believe that the uptrend will continue in the long term. There are several reasons for this. First of all, buy signals are still in place. Secondly, the fundamental background has not changed over the past week. Besides, the traders' sentiment stayed largely the same. Finally, nothing has drastically changed over the past week. So why should traders suddenly change their mind and rush to the US dollar if they have been actively getting rid of it over the last year? Thus, the greenback can rely only on a technical correction. To enter the correctional phase, we need to wait for the price to settle below the Ichimoku cloud and the 50.0% Fibonacci level.

COT report

analytics6030b4fe58756.jpg

For the trading week of February 9-15, EUR/USD rose by 70 pips. Volatility during this period was very low. On the chart above, you can see that the pair has not significantly decreased over the past weeks. We constantly mention the correction in January. But if you look at the chart, it becomes clear that this correction is nothing compared to the entire 11-month uptrend. It was a simple pullback. So we can conclude that market participants still do not favor the US dollar. Two weeks ago, the COT report recorded a sharp drop in the number of buy contracts for the non-commercial group of traders. Then, the net positions for non-commercial traders dropped by 33,000 at once. It could be a good start for a downtrend, but next week the COT report recorded an increase in the net positions of major players. The latest report released on Friday showed changes in favor of the bulls. This means that professional traders have again started to buy the euro. Thus, 2,500 new long contracts were opened along with 1,300 short contracts. The changes are minimal and do not greatly affect the overall picture. So, the bullish sentiment prevails with more than 220,000 long contracts, while only 84,000 short contracts remain open. The indicators below clearly show that the trend is not going to change to bearish. The green and red lines of the first indicator reflect the net positions of the non-commercial and commercial groups of traders. The lines do not converge, therefore, the current trend remains in place.

Not so many important fundamental events happened this week. Neither Jerome Powell nor Christine Lagarde made any statements. Besides, no serious fundamental topics were discussed either in the EU or in the US. Macroeconomic reports published during the week were not of great importance as well so or they were just ignored by the markets. By and large, traders still await the new stimulus package that should be approved in the US anytime soon. This economic rescue package is high on the agenda now, as it can have a significant positive effect on the US economy, but at the same time it will put pressure on the US dollar. However, there is still no information on it, so investors have pay attention to other topics. Thus, in the European Union, the Italian political crisis seems to have been resolved. In addition, the fiscal aid from the EU economic recovery fund should be distributed among those countries that have prepared detailed recovery plans for their economies. They will receive grants and loans from the European Union. Yet, this information has not been officially confirmed. Traders also hoped to get some hints from the Fed's minutes this week, but the report lacked any important or new information.

Trading plan for the week of February 22 - 26:

1) The quotes bounced off the Senkou Span B line and the 50.0% Fibonacci level - 1.1975 and are likely to maintain the bullish trend, since these signals have not been cancelled. Thus, we would recommend buying the pair in small volumes considering the beginning of a new uptrend. The immediate target for the next week or two is the resistance level of 1.2305 which is located near the 2.5-year highs. This is the level where buyers will eventually head for.

2) The downtrend may also resume but only if the bears manage to break through the Senkou Span B line on the 24-hour timeframe and the 50.0% Fibonacci level as well. If this happens, we would recommend opening new short positions with the targets at the support areas of 1.1885 and 1.1778. A lot will depend on the global fundamental factors that are still not in favor of the US dollar.

Notes for the pictures:

The resistance/support levels are the target levels when opening long/short positions. You can place take profit levels next to them.

Indicators Ishimoku, Bollinger bands, MACD

Areas of support and resistance are the ones from where the price has rebounded a few times.

Indicator 1 in the COT charts is a size of net positions for each category of traders.

Indicator 2 in the COT charts is a size of net positions for the non-commercial group.

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

Bitcoin shows meteoric rise: BTC market cap passes $1 trillion

Trading 20 Fév 2021 Commentaire »

analytics6030acc47111e.jpg

Bitcoin has once again shown that it is the real king of the crypto market. BTC is the leading asset in terms of both the cost per coin and market cap. Bitcoin has reached a market capitalization of $1 trillion for the first time.

The highest level of bitcoin's market capitalization has stirred up the crypto market. The rally, triggered by the staggering growth of the crypto market flagship, generates such a profit that traders of traditional assets like stocks, bonds, and gold can only dream of. It seems that the crypto market, which has long been considered unreliable and a place for airy-fairy investors is ready to become of the leading and gainful markets.

On Friday, February 19, BTC hit the record high of $53,000. Since the beginning of this month, the capitalization of the coin has increased by $400 billion. Late in the evening, at the end of February 19, bitcoin surged again. By 22:00 Moscow time, a new historical record was broken: bitcoin reached $55,000 and then $55,530. In a few hours, the virtual asset rose in price by another $2,000. On the morning of Saturday, February 20, bitcoin is trading near $55,700, sustaining its bull run.

analytics6030acd98c835.jpg

The current situation leads to heated discussions between supporters and opponents of the crypto market. Crypto skeptics believe that BTC which is a highly volatile asset has scored gains amid signs it is winning acceptance among mainstream investors, large companies, and institutional investors. Opponents of bitcoin claim that it is not backed by anything – neither money nor gold. Its growth is only due to faith in blockchain technology. Crypto enthusiasts think otherwise. They are certain that bitcoin has become popular as it can hedge risks, e.g. inflation. It means a lot in the modern world as interest rates in a number of countries remain near zero.

Among other advantages, experts consider the fact that bitcoin coin is traded for dollars. This attracts many investors and traders, Shane Oliver, the head of investment strategy with AMP Capital Investors, pointed out. During the period of so-called easy money, the number of such market players increases. This is a powerful driver of the growth of the first cryptocurrency, the expert notes.

BTC rally was also fueled by the decision of major companies such as Tesla and MicroStrategy to invest in bitcoin. Not long ago, Tesla, the manufacturer of electric cars, invested $1.5 billion in BTC. MicroStrategy upsized a debt offering through convertible notes to $900 million to buy more bitcoins. According to analysts, such actions of large market players have a positive impact on the dynamics of bitcoin. It seems that more and more market giants are inclined to recognize bitcoin as a means of payment. According to a survey conducted by Bank of America, investment in BTC has become the most popular one in the world along with a long position in tech stocks and a short position on USD.

In 2021, the crypto market is experiencing its finest hour: the dynamics of the cryptocurrency index have overtaken the dynamics of stock exchanges, gold, and bonds. However, it is volatile. So, everything may change all of a sudden. In case of such a scenario, bitcoin will lose popularity due to a number of factors, namely strict government regulation or losses among traders, the head of AMP Capital Investors summarizes.

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

GBP/USD: Retail sales slump. Why pound sterling rises?

Trading 20 Fév 2021 Commentaire »

analytics602fcac554d08.jpg

On Friday, the UK unveiled extremely pessimistic data. In January, the UK retail sales tumbled by 8.2%. The data is significantly below the forecast and 5.9% lower than in the previous year. Moreover, retail sales excluding automobile fuel nosedived by 8.8%.

The situation is really gloomy. However, buyers of the pound sterling pushed the currency higher to 1.40. Why have markets ignored such a disappointing report? It is quite possible that traders consider this reading as a short-lived phenomenon. Such a slump was caused by lockdown measures imposed at the beginning of the year. At the moment, the epidemiological situation is getting better and people are receiving their doses of the coronavirus vaccine. Analysts suppose that in the following months, macroeconomic indicators will rise. That is why markets showed no reaction to such weak reports, betting on future positive data.

Notably, the recently published data on higher inflation alleviated concerns about a prolonged economic recovery. Of course, the UK economy was severely damaged, but it is getting back on track quite fast.

Since last September, the pound sterling has been confidently advancing. Moreover, the rise has accelerated in February. On Friday, the pound/dollar pair tested the psychological level of 1.40. It is a very important level for the British pound.

analytics602fcb46ab8bb.jpg

What is more, the weakening US dollar is supporting the pound sterling. The greenback dropped after the publication of the US labor market figures. The report signals that it is too early to expect a rapid economic recovery in the US. Jerome Powell was right saying that the US labor market would need more than a year to spread its wings again.

On Friday, traders were focused on the US business activity and existing home sales reports. Lower business activity may force the government to take additional support measures in the near future.

At the same time, the UK PMI data for February was quite strong. Thus, the indicator reached the level of 49.8 points, remaining slightly below the 50-point threshold that separates growth from contraction. Strong reports supported the decision of the Bank of England to avoid further easing. This, in turn, is also boosting the pound sterling. The pound/dollar pair has all chances to continue climbing. However, it will be rather difficult to consolidate above 1.40.

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

Bitcoin reaches new record high and total: what is next?

Trading 20 Fév 2021 Commentaire »

As we expected, bitcoin skyrocketed amid the hype and constant news about intentions of large companies to invest in the virtual asset. Bitcoin is very close to the level of $54,000. The odds are that bitcoin will not stop there. As of 18:00 on February 19, the price of the cryptocurrency was $53.752. Apart from a new price record, Bitcoin's market value has surpassed $1 trillion, a milestone that puts the cryptocurrency in a very exclusive club.

analytics602fe7eb0402b.jpg

The entire cryptocurrency market showed a meteoric rise amid such news. After the fall in the crypto market, Ethereum jumped to its usual levels and successfully consolidated there. Within a day, the asset, which is close to the recent record, is likely to break through the level of $2,000.

analytics602fe7e133c9a.jpg

Ripple also gained momentum even though there were no fundamental factors for its growth. After the news about the upcoming trial between the company and the SEC, the coin fell to $0.5. However, over the past day, XRP has gained momentum growing to $0.553.

analytics602fe7f9cf162.jpg

Like Ethereum, Litecoin faced some pressure due to bitcoin's growth. However, later, it also moved up. The cryptocurrency halted its growth at $232. Currently, it is rising up again.

analytics602fe8107e6ec.jpg

Currently, the crypto market is literally experiencing a boom amid news about new investments in bitcoin, the use of bitcoin and other cryptocurrencies as a means of payment in different countries, as well as the start of research on new opportunities for digital assets. It seems that everything is moving according to the scenario where BTC will hit new record highs. Bitcoin is likely to reach the level of $56. Ethereum may break through the threshold of $2,000. We can expect new jumps in Litecoin as well. The growth of the cryptocurrency market will continue until the beginning of spring when a full-scale market correction may occur. It may hit altcoins especially hard.

Bitcoin is unlikely to extend large losses, roughly $4,000-5,000, but this decline will greatly affect other coins. It may also lead to investors' losses. In a situation where the cryptocurrency market is closely linked to bitcoin quotes, other coins can fall in price much more. The situation is particularly unpleasant for the Ripple token, which, in addition to the market correction, is under pressure due to the trial. Nevertheless, the correction is necessary for the further development of the cryptocurrency market. The beginning of 2021 turned out to be a landmark for the entire industry. Until recently, the crypto market barely passed the level of one trillion dollars in total capitalization, and a few months later, bitcoin alone broke this supposedly unachievable level.

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

Price of natural gas approaches $4 due to cold weather in Texas

Trading 20 Fév 2021 Commentaire »

analytics602fd36fc9f04.jpg

The world is on the verge of a new global crisis in the field of energy resources due to the unusual frosts that hit the state of Texas. Cold weather is a natural anomaly for this region. Besides, it has been hit by the strongest snowstorm in the last 30 years. So, in Austin, the capital of Texas, the temperature dropped to -5°C and in Dallas to -8°C. At the same time, outside of cities, the air temperature is usually even lower. Texas was left without heating and partially without electricity in record-low temperatures.

Arctic frosts have paralyzed part of energy production. The bad weather caused the partial shutdown of oil production, which eventually decreased by 40%, or 4 million barrels per day. Experts have not had time yet to assess the scale of such a disaster. At first, investors believed that oil production would be stopped only for 2 or 3 days. However, the current situation is likely to continue until the weekend. The full recovery of oil production will recover only after a few weeks

The cost of natural gas also sank significantly due to such a situation. Texas Governor Greg Abbott said on Tuesday that natural gas has frozen in pipelines and wells as there no special equipment for its storage. The climate in Texas is usually warm. As a result, the infrastructure for the production and transportation of natural gas in the state power system ERCOT simply ceased to function. At the same time, homes in Texas are heated with the help of this energy carrier. Most of the local power plants were also left without fuel.

As a result, natural gas futures for March have already approached the level of $4 per million British thermal units (BTU). On the New York Mercantile Exchange, natural gas futures for March are valued at $3.10 per million British thermal units.

analytics602fd35555f08.jpg

Yesterday, before the start of the US session on the Henry Hub platform, futures for March were trading near the highest level in three and a half years - $3,316. By the way, since the beginning of this year, natural gas futures have risen in price by almost 30%. This happened almost simultaneously with the rise in gasoline prices, whose cost this year has risen above other energy carriers.

Although demand for gas from ordinary consumers and businesses is retreating from the high values of the beginning of the week, it still remains at a very high level.

The current level of natural gas production is about 75 billion cubic feet per day, which is lower than the production of this energy carrier in 2018. Gas market analysts expect that the Energy Information Administration (EIA) will announce a sharp reduction in gas reserves, namely by about 252 billion cubic feet (for the week that ended on February 12). In other words, analysts predict a drop in energy production by 47% compared to the previous week. This decrease will be the most noticeable since the time of the historic high of 2018 when gas reserves for the week decreased by 359 billion cubic feet.

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

Dollar Stays Weak For 2nd Straight Day

Trading 20 Fév 2021 Commentaire »

The U.S. dollar continued to exhibit weakness against most of its peers on Friday, weighed down by some weak economic data released on Thursday and on U.S. Treasury Secretary Janet Yellen's comments about the need for additional economic stimulus.

Yellen, who urged lawmakers to approve President Joe Biden's $1.9 trillion relief package, said the proposal could help the U.S. get back to full employment within a year. She added that recent signs of improvement in the U.S. economy are no reason to scale back the relief plan.

She also dismissed Republican complaints about the size of the proposed bill, arguing, "The price of doing too little is much higher than the price of doing something big."

Data released on Thursday showed an increase in jobless claims and a bigger than expected jump in import prices.

In economic release on Friday, a report released by the National Association of Realtors showed existing home sales rose by 0.6% to an annual rate of 6.69 million in January after climbing by 0.9% to a revised rate of 6.65 million in December. Compared to the same month a year ago, existing home sales in January were up by 23.7%.

Economists had expected existing home sales to tumble by 2.2% to a rate of 6.61 million in December from the 6.76 million originally reported for the previous month.

The dollar index, which eased to 90.18 in the European session, recovered some lost ground but was still well below the flat line a little while ago, quoting at 90.37, down 0.24% from previous close.

Against the Euro, the dollar weakened to $1.2146 before recovering to $1.2115, but was still trailing previous close by 0.17%. The flash reading of the IHS Markit eurozone composite purchasing managers index rose to a two-month high of 48.1 in February from 47.8 in January.

The Pound Sterling was stronger, fetching $1.4007 a unit, after settling at $1.3975 on Thursday. The UK private sector output contracted only marginally in February reflecting a near-stabilization in services activity amid continuing recovery in manufacturing, a closely watched survey showed.

The Yen firmed up to 105.44 a dollar, gaining from 105.68.

The dollar was weak against the Aussie. With the AUD-USD pair at 0.7870, the dollar is down by about 1.3%. Retail turnover in Australia increased 0.6% month-on-month in January, after a 4.1% decline in December. Economists had forecast a 4.2% fall.

Against Swiss franc, the dollar was slightly stronger, fetching CHF 0.8967 a unit. Switzerland's industrial production declined 3.8% year-on-year in the fourth quarter of 2020, data from the Federal Statistical Office showed.

The Loonie strengthened against the dollar, firming up to C$1.2620 from C$1.2679. Data from Statistics Canada showed retail sales in the country decreased 3.4% in December over the previous month. In November, retail sales had surged 1.3%. Sales were expected to drop by 2.5% in December.


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