America’s Roundup: Dollar dips as weak data fans growth fears, Wall Street ends lower ,Gold jumps 1.5%, Oil rebounds from two days of losses in volatile trade-May 20th,2022

Posted at 20 May 2022 / Categories Market Roundups

Market Roundup

•US Continuing Jobless Claims 1,317K, 1,320K forecast, 1,343K previous

•US Jobless Claims 4-Week Avg 199.50K , 192.75K previous

•US Initial Jobless Claims 218K, 200K forecast, 203K previous

•US May Philly Fed CAPEX Index 9.60, 19.90 previous

•US May Philly Fed Employment 25.5,41.4 previous

•US May Philly Fed Business Conditions 2.5,8.2 previous

•US May Philadelphia Fed Manufacturing Index 2.6,16.0 forecast, 17.6 previous

•Canada Apr New Housing Price Index (MoM)  0.3%,0.6% forecast,1.2% previous

•US Apr Existing Home Sales 5.61M, 5.65M forecast,5.77M previous

•US Apr Existing Home Sales (MoM) -2.4%, -2.7% previous

•US  Leading Index (MoM) -0.3%, 0.3% forecast,0.3% previous

•US Natural Gas Storage 89B,87B forecast, 76B previous

Looking Ahead - Economic Data (GMT)

•03:00New Zealand  Credit Card Spending (YoY)                3.4% previous

Looking Ahead - Economic events and other releases (GMT)

•No events ahead

Currency Summaries

EUR/USD: The euro rose on Thursday as investors priced in the chance of an aggressive near-term tightening path by the European Central Bank, while the safe-haven dollar paused after significant gains in the previous sessions. Money markets are pricing in around 105 basis points (bps) of ECB rate hikes from around 95 bps on Tuesday before ECB official Klaas Knot signalled a 50-basis-point rate increase was possible in July. U.S. money markets are still discounting around 200 bps of Fed rate hikes by December 2022.Risk appetite in the currency market is fragile as stocks slid, tracking Wall Street's worst day since mid-2020, as warnings from some of the world's biggest retailers underscored how hard inflation is biting. Immediate resistance can be seen at 1.0641(50%fib), an upside break can trigger rise towards 1.0724(61.8% fib).On the downside, immediate support is seen at 1.0550 (38.2%fib), a break below could take the pair towards 1.0444(23.6%fib).

GBP/USD: Britain’s pound inched up against the dollar on Thursday, but stayed clear of recent two-week highs as soaring inflation combined with a murky growth outlook prevented a stronger rebound.Sterling was up 0.5% at $1.2464. However, the currency stayed off highs of $1.25 seen earlier this week, having tumbled on Wednesday after data showed UK inflation rising to a 40-year record and concerns flared about a sharp economic slowdown given the pain inflicted on consumers. An easing in the safe-haven dollar also aided the pound’s recovery, with the market awaiting British April retail sales data on Friday for fresh direction. Immediate resistance can be seen at 1.2547(38.2%fib),an upside break can trigger rise towards 1.2646(50%fib).On the downside, immediate support is seen at 1.2448 (38.2%fib), a break below could take the pair towards 1.2373 (14DMA).

USD/CAD: The Canadian dollar strengthened to its highest level in two weeks against the U.S. dollar on Thursday as oil prices rose and investors reduced their exposure to the U.S. currency.The loonie was trading 0.6% higher at 1.2810 to the greenback, or 78.06 U.S. cents, after touching its strongest level since May 5 at 1.2784. On Wednesday, the currency fell 0.6% as Wall Street tumbled. The price of oil, one of Canada’s major exports, rebounded from two days of losses on optimism that easing lockdown restrictions in China could boost demand. U.S. crude oil futures settled 2.4% higher at $112.21 a barrel. Immediate resistance can be seen at 1.2858 (21DMA), an upside break can trigger rise towards 1.2883 (23.6%fib).On the downside, immediate support is seen at 1.2800(38.2%fib), a break below could take the pair towards 1.2717(50%fib).

USD/JPY: The dollar edged lower against the Japanese yen on Thursday softness in U.S. economic data supported growth concerns. Initial jobless claims unexpectedly rose last week, reaching a four month-high of 218,000 for the week ended May 14, the highest level since January. The number likely suggested slowing demand for labor amid tightening financial conditions. At the same time, a separate report from the Philadelphia Fed on Thursday showed its business conditions index dropped to a reading of 2.6 in May from 17.6 in April.U.S. existing home sales also fell to their lowest in nearly two years in April, as house prices jumped to a record high amid a persistent lack of inventory. Strong resistance can be seen at 128.48(23.6%fib), an upside break can trigger rise towards 129.25(21DMA).On the downside, immediate support is seen at 126.76 (Lower BB), a break below could take the pair towards 125.87(38.2%fib).

Equities Recap

European stocks fell on Thursday to extend losses from the previous session, as mounting concerns over high inflation and slowing global growth sent investors flocking to the safe haven of the dollar and bonds.

The UK's benchmark FTSE 100 closed down by 1.82 percent, Germany's Dax ended down  by 0.90 percent, and France’s CAC finished the down by 1.26 percent.

Wall Street ended lower after a volatile session on Thursday, with Cisco Systems slumping after giving a dismal outlook, while investors fretted about inflation and rising interest rates.

Dow Jones closed down by 0.75 percent, S&P 500 ended down 0.58 percent, Nasdaq finished the day down by 0.26 percent.

Treasuries Recap

U.S. Treasury yields fell on Thursday, with those on benchmark 10-year notes sliding to three-week lows, as continued softness in U.S. economic data supported growth concerns amid an aggressive path of monetary tightening by the Federal Reserve.

U.S. 10-year yields dropped to 2.772%  , the lowest since late April, and was last down 7 basis points at 2.815%.

Commodities Recap

Gold rose over 1.5% on Thursday as a slide in the dollar and Treasury yields burnished bullion’s safe-haven appeal after weak U.S. jobs numbers compounded economic concerns.

Oil prices rebounded from two days of losses in a volatile session on Thursday, bolstered by weakness in the dollar and expectations that China could ease some lockdown restrictions that could boost demand.

Brent crude futures for July settled at $112.04, a gain of $2.93 a barrel, or 2.7%. U.S. West Texas Intermediate (WTI) crude futures for June settled up $2.62, or 2.4%, to $112.21 a barrel.

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