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Dollar Gains Against Major Counterparts As Focus Shifts To Fed Policy Meeting

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The U.S. dollar stayed firm against most of its major counterparts on Friday amid bets the European Central Bank and the Bank of England are unlikely to tighten their monetary policies any time soon.

Preliminary data released by the University of Michigan today showed a bigger than expected rebound in U.S. consumer sentiment in the month of June.

The report said the consumer sentiment index climbed to 86.4 in June after falling to 82.9 in May. Economists had expected the index to rise to 84.0.

The index of consumer expectations jumped to 83.8 in June from 78.8 in May, while the current economic conditions index inched up to 90.6 from 89.4.

Meanwhile, investors looked ahead to the upcoming policy meeting of the Federal Reserve. The Fed is scheduled to announce its policy after its two-day meeting, scheduled to take place on June 15-16.

The dollar index, which rose to 90.61, is currently at 90.51, up nearly 0.5% from the previous close.

Against the Euro, the dollar strengthened to 1.2109, gaining nearly 0.6%.

The Pound Sterling weakened against the dollar, fetching $1.4115, more than 0.4% down from Thursday’s close of $1.4176. The U.K. economy grew at the fastest pace since July 2020 as government restrictions affecting economic activity continued to ease in April, data from the Office for Statistics showed.

Gross domestic product rose 2.3% month-on-month in April, faster than the 2.1 percent expansion seen in March. The rate was forecast to improve to 2.2%.

The Yen weakened to 109.68 a dollar, easing from 109.32 a dollar Thursday evening.

Against the Aussie, the dollar firmed to $ 0.7705, gaining from $0.7754 a unit of the Australian currency.

The Swiss franc dropped to 0.8983 a dollar from 0.8945, while the Loonie weakened to 1.2165 a dollar from 1.2096.

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

China New Yuan Loan Data Due On Thursday

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China will on Thursday see May numbers for new yuan loans, highlighting a light day for Asia-Pacific economic activity. New yuan loans are forecast to be worth CNY1410 billion, down from CNY1470 billion in April. The M2 money supply is called steady at 8.1 percent, while outstanding loan growth is expected to slow to 12.3 percent on year from 12.3 percent a month earlier.

Japan will release May figures for producer prices, with forecasts suggesting an increase of 0.5 percent on month and 4.5 percent on year after rising 0.7 percent on month and 3.6 percent on year in April.

Australia will see June’s inflation forecast from the Melbourne Institute; in May, inflation was seen higher by 3.5 percent on year.

Indonesia will provide April numbers for retail sales; in March, sales plummeted 14.6 percent on year.

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

Dollar Rebounds After Early Weakness, But Stays Somewhat Subdued

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After drifting lower against its major counterparts in the Asian session on Wednesday, the U.S. dollar recovered gradually and pared some losses as the day progressed.

Traders looked ahead to the upcoming U.S. inflation data, due on Thursday, for clues about the tapering of the asset purchase program by the Federal Reserve.

It is widely felt that any notable surge in consumer price inflation might prompt the Fed to consider discussions on tapering its bond buying program. According to economists, the consumer price inflation is likely to rise to 0.4% on month in May, to an annual rate of 4.7%.

Core CPI is seen at 0.4% on a monthly basis and 3.4% year-on-year.

Data from the Commerce Department showed wholesale inventories in the U.S. rose by 0.8% from a month earlier to US$ 698.0 billion in April, after seeing a 1.2% increase in the previous month.

The dollar index, which dropped to 89.84 in the Asian session, has advanced to 90.17, gaining about 0.11%.

Against the Euro, the dollar has recovered to $1.2179, gaining about 0.05%, after having weakened to $1.2220 earlier in the day.

The European Central Bank is scheduled to announce its monetary policy on Thursday. The ECB is widely expected to hold its policy rates and stimulus measurs unchanged.

Against Pound Sterling, the dollar strengthened to $1.4114 a unit of Sterling, after having weakened to $1.4191 from Tuesday’s close of $1.4154.

The Yen weakened to 109.63 a dollar, easing from 109.49 a dollar.

Against the Aussie, the dollar firmed to 0.7732 from 0.7742. The Swiss franc strengthened a bit to 0.8959 a dollar, gaining from 0.8968.

The Loonie was down slightly against the dollar, at C$1.2112. The Bank of Canada left its key overnight rate unchanged at 0.25%, as expected. The central bank has also kept its quantitative easing program at a target pace of $3 billion per week, following a C$1 billion reduction in the previous meeting.

The bank added that it remains committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2% inflation target is sustainably achieved.

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

Crude Oil Futures Settle Marginally Lower

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Crude oil prices edged lower on Wednesday after data showed a jump in U.S. gasoline stockpiles in the week ended June 4.

However, the downside was just marginal as the official data showed crude inventories fell for a third straight week.

According to the report released by the Energy Information Administration (EIA), crude inventories in the U.S. dropped by 5.2 million barrels last week, higher than an expected drop of about 4.1 million barrels.

The EIA data showed gasoline inventories rose by 7 million barrels in the week as against forecast for an increase of about 1 million barrels. Meanwhile, distillate stockpiles increased by 4.4 million barrels last week, beating forecasts for a 400,000-barrel rise.

On Tuesday, the American Petroleum Institute’s report showed crude inventories in the U.S. fell by 2.1 million barrels in the week ended June 4.

West Intermediate crude oil futures for July ended down $0.09 or about 0.1% at $69.96 a barrel.

Brent crude futures settled at $72.22 a barrel today.

The EIA data also showed crude stocks at the Cushing, Oklahoma storage hub edged up by 200,000 barrels to 45.7 million barrels for the week.

According to a monthly report released Tuesday, the EIA forecast a decline in global oil inventories in the second half of 2021, reinforcing expectations of a demand-led recovery.

“We expect rising production will end the persistent global oil inventory draws that have occurred for much of the past year and lead to relatively balanced global oil markets in the second half of 2021,” the EIA said in the report.

There is an optimism around the demand outlook after the U.S. Centers for Disease Control and Prevention (CDC) eased travel recommendations for more than 110 countries and territories, including Japan just ahead of the Olympics.

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

Australia Data On Tap For Wednesday

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Australia is scheduled to release a batch of data on Wednesday, headlining a busy day in Asia-Pacific economic activity. On tap are April figures for building permits, May inflation data and June results for the Westpac consumer confidence index.

Building permits were up 18.9 percent on month in March. Inflation is tipped to fall 0.1 percent on month and rise 1.6 percent on year after slipping 0.3 percent on month and rising 0.9 percent on year in April – while producer prices are expected to jump an annual 8.5 percent after gaining 6.8 percent a month earlier. The consumer confidence index sank 4.8 percent in May to a score of 113.1.

The Philippines will provide April figures for imports, exports and trade balance. In March, imports were up 16.6 percent on year and exports surged an annual 31.6 percent for a trade deficit of $2.412 billion.

New Zealand will see Q1 numbers for manufacturing sales; in the three months prior, manufacturing sales were up 2.0 percent on year.

South Korea will release final Q1 figures for gross domestic product and May unemployment data. The previous reading for GDP suggested an increase of 1.2 percent on quarter and a decline of 1.2 percent on year, The jobless rate in April was 3.7 percent.

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

Dollar Recovers From Recent Losses As Markets Await U.S. Inflation Data

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The U.S. dollar gained a bit against its major counterparts on Tuesday, as traders looked ahead to the data on consumer inflation for the month of May, due later in the week.

The inflation data is due out on Thursday. A strong inflation reading will likely fuel concerns that the Federal Reserve might start discussions on tapering its asset buying program.

The Federal Reserve’s next meeting is scheduled to take place on June 15 and 16.

U.S. Treasury Secretary Janet Yellen commented on Sunday that an interest rate hike would be positive for the economy. Yellen said inflation could reach as high as 3% this year as recovery continues.

Data released by the Commerce Department showed U.S. trade deficit narrowed in the month of April, dropping to $68.9 billion in the month from a revised $75.0 billion in March. Economists had expected the deficit to narrow to $69.0 billion from the $74.4 billion originally reported for the previous month.

The narrower trade deficit came as the value of exports jumped by 1.1% to $205.0 billion, while the value of imports slumped by 1.4% to $273.9 billion.

A report from the National Federation of Independent Business said the NFIB Small Business Optimism Index in the United States stood at 99.6 in May 2021, slightly down from the previous month’s five-month high and well below pre-pandemic levels. It was the first decline in morale this year.

The dollar index rose to 90.18 in the Asian session, and despite falling to around 90.00 by mid morning, recovered subsequently to 90.12, netting a gain of nearly 0.2%.

Against the Euro, the dollar strengthened to $1.2173, gaining from around $1.2190. Revised data from Eurostat showed GDP in the 19 countries sharing the euro contracted 0.3% sequentially for a 1.3% annual decline. That is a modest upside revision compared with the previous estimates of -0.6% and -1.8%, respectively.

The Pound Sterling weakened against the dollar, fetching $1.4154, as against $1.4180 Monday evening. U.K. retail sales increased notably in May driven by the relaxation of restrictions related to the coronavirus pandemic, data from the British Retail Consortium showed. Total sales grew 10% year-on-year in May and like-for-like sales climbed 23.7%.

The Yen weakened to 109.49 a dollar, from around 109.28. Japan’s gross domestic product contracted an annualized 3.9% on year in the first quarter of 2021, the Cabinet Office said in Tuesday’s final reading. That exceeded expectations for a decline of 4.8% following the 11.7% surge in the three months prior.

Against the Aussie, the dollar strengthened to 0.7737. The Swiss franc gained marginally to CHF 0.8967 against the dollar, while the Loonie weakened to 1.2114.

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

Japan GDP Data On Tap For Tuesday

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Japan will on Tuesday release final Q1 numbers for gross domestic product, highlighting a busy day for Asia-Pacific economic activity. GDP is expected to sink 1.2 percent on quarter and 4.8 percent on year after climbing 2.8 percent on quarter and 11.7 percent on year in the three months prior.

Japan also will see April figures for current account and May results for the eco watchers survey. The current account is tipped to show a surplus of 1,500.6 billion yen, down from 2,650.1 billion yen in March. In April the eco survey for current conditions had a score of 39.1, while the outlook was at 41.7.

South Korea will provide April numbers for current account; in March, the current account surplus was $7.82 billion.

Taiwan will release May figures for imports, exports and trade balance. Imports are expected to jump 25.7 percent on year after gaining 26.4 percent in April. Exports are called higher by an annual 26.0 percent after spiking 38.7 percent in the previous month. The trade surplus is pegged at $5.995 billion, down from $6.18 billion a month earlier.

Taiwan also will see May figures for consumer prices; in April, overall inflation was up 0.2 percent on month and 2.09 percent on year, while wholesale prices climbed an annual 9.62 percent.

The Philippines will provide Q2 unemployment figures and April data for industrial production. In Q1, the jobless rate was 8.7 percent, while industrial output plummeted 74.2 percent on year in March.

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

Dollar Extends Weakness Against Other Major Currencies

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The U.S. dollar traded weak against most of its peers on Monday with the focus shifting to upcoming policy meetings of the Federal Reserve and European Central Bank.

A drop in U.S. Treasury yields weighed on dollar.

Traders also reacted to U.S. Treasury Secretary Janet Yellen’s comments that a “slightly higher” interest rate environment would be a positive for the economy.

Data on U.S. inflation, due later this week, is likely to provide some indications about the central bank’s policy outlook.

The dollar index dropped to 89.91 around noon, losing more than 25%. It was last seen at 89.98.

Against the Euro, the dollar weakened to $1.2193, giving up about 0.21%. Euro area investor confidence rose for the fourth straight month in June to its highest level in over three years as financial experts assessed the current economic situation more favorably, survey data from the behavioral research institute Sentix showed.

The Sentix investor confidence index for Eurozone climbed to 28.1 from 21.0 in May. Economists had expected a score of 26.

The latest reading was the highest since February 2018, the think tank said.

The Pound Sterling strengthened to $1.4180, gaining 0.17%.

The Yen strengthened to 109.26, up 0.26% from Friday’s close. The Aussie was stronger with the AUD-USD pair quoting at 0.7757, about 0.23% up from the previous close.

The Swiss franc strengthened to CHF 0.8975 a dollar, gaining from CHF 0.8994, while the Loonie gained marginally at C$ 1.2080, recovering from C$ 1.2107 a dollar.

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

Oil Futures Settle Lower

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Crude oil prices drifted lower on Monday, coming off 2-1/2-year highs, after data showed a drop in China’s crude oil imports in April.

Traders also seemed to be weighing the prospects of Iranian oil coming into the market. Iran and global powers will enter a fifth round of talks on June 10 in Vienna that could include Washington lifting economic sanctions on Iranian oil exports.

However, the downside was limited as traders continued to hope demand for energy will see a significant increase in the U.S. and Europe. In India, Delhi and Mumbai have begun to ease coronavirus restrictions.

West Texas Intermediate Crude oil futures for July ended down by $0.39 or about 0.6% at $69.23 a barrel, coming off an early high of $70.00 a barrel.

Brent crude futures shed about $0.40 or 0.6% at $71.49 a barrel.

Data from China showed crude imports during January – May 2021 rose by 2.3% year-over-year. However, imports in May totaled 9.69 million barrels a day, down from 9.86 million barrels a day in the previous month. Year-over-year, that was down as much as 14.6%.

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

Gold Futures Settle Higher As Dollar Slips

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Gold futures settled higher on Monday, gaining for a second consecutive session, as the dollar weakened a bit.

The dollar index dropped to 89.91 around noon, losing more than 0.25%. It was last seen hovering around 89.95.

The yield on 10-year U.S. Treasury Note rose to 1.566% today, limiting gold’s uptick.

Gold futures for August ended up by $6.80 or about 0.4% at $1,898.80 an ounce. Gold futures gained about 1% on Friday.

Silver futures for July ended higher by $0.122 or 0.4% at $28.018 an ounce, while Copper futures for July shed $0.0025, settling at $4.5265 per pound.

Gold prices edged higher earlier in the session after U.S. Treasury Secretary Janet Yellen said a “slightly higher” interest rate environment would be an advantage to the economy.

Investors awaited key U.S. inflation data due later this week for more indications about the Fed’s policy outlook.

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

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