The US Dollar continued to appreciate against most other major currencies, as shown by the performance of the USDX, and also gained against several emerging market currencies, pairs like USD/ZAR , with USD/MXN and USD/TRY all heading higher. Although some other currencies did not devalue further against the greenback, the USD/INR pair, for example, failed to test new highs, while the USD/CNH pair remained lower on Thursday morning and remained overall well within the range it occupied in the past. three weeks.
Sentiment in stock markets was broadly positive on Thursday morning, with European indices like Europe 50 and France 40 managing to recoup losses suffered earlier this week and trading with a moderate rise on a weekly basis. US and Japanese markets like the US 500 and Japan 225 (Yen) were also trading higher, while China’s A50 index is still deep in the red on a weekly basis.
On Thursday in the US, the Challenger Job-Cut Report, ADP Employment Report, Weekly Unemployment Insurance Claims Data and Trade Balance Statistics for May will be released. In Canada as well, the trade balance statistics will be published. Later, Japan releases household spending data.
The EUR/USD rate fell again quite significantly on Wednesday, with the pair trading at times below 1.02 for the first time in twenty years. Although the Euro was significantly weakened against other major currencies, it fared better than many Eastern European currencies with pairs like EUR/HUF and EUR/PLN falling. trading significantly higher this week, meaning these currencies have fared even worse against the strong greenback.
Minutes from the last FOMC meeting confirmed that the central banking institution is eyeing a further 50 to 75 basis point rate hike at the next meeting, although policymakers seem well aware of the potential impact on the economy in order to achieve the objective of lowering inflation. On Thursday, the European Central Bank (ECB) also publishes the minutes of the last monetary policy meeting. Although, given that sentiment on economic growth has turned quite negative, traders are already cutting bets on rate hikes for the Fed later this year and some see this as a possibility that rate cuts may eventually follow.
As gold prices fell quite significantly again on Wednesday, the precious metal hit a fresh 10-month low after the precious metal’s value in US dollars fell around 3.5% in class this week. Silver and platinum prices are also under pressure, again reaching new lows since 2020, while palladium prices have remained well within the range seen over the weeks and months, while trading almost unchanged since the beginning of this month.
The strong dollar has clearly had an impact on the price of gold, although this may not be enough to explain all the recent losses, as gold (EUR) CFDs were also deep in the red over the course of the year. of the last two days, just as the common European currency fell. to its weakest position in two decades.
Oil prices fell Wednesday for the second day in a row this week, putting oil on course for the worst weekly performance since early June. API data released in the evening only slightly lowered the market price, with crude oil inventories rising by 3.8 million barrels, while at the same time gasoline and of distillates decreased by 1.8 million barrels and 0.6 million barrels respectively.
While it is still unclear whether the G7 countries are planning to cap Russian oil prices and if, in fact, what impact this would have on world market prices, it appears talks with Iran on a new nuclear deal is not progressing as well as previously expected with Reuters reporting that the US Treasury Department has added new sanctions related to Iran’s oil sector.
On Thursday, the Energy Information Administration (EIA) is also releasing weekly data that will include changes in crude oil, gasoline and distillate inventories.
500 United States
Major stock indexes like the US 500 and US Tech 100 continued to rally, with both indexes on track to end the week in the green if they stay at their current levels.
Once again, heavy losses were seen among energy stocks (US Energy ETF -1.71%) as oil prices fell to a new low since April. In addition to oil companies affected by this slowdown such as Halliburton (-1.42%) and Exxon Mobil (-1.80%), the shares of cruise lines such as Norwegian Cruise Line (-9.55%) and Royal Caribbean (- 7.17%) is still seeing significant volatility and closed among the worst performers among the S&P 500 constituents after only the day before significant market outperformance and the end of the day among the top positions.
Shares of companies involved in the app delivery industry, including Uber (-4.47%) and DOORDASH (-7.23%) came under pressure after news that Amazon (+0.84% ) would add a Grubhub membership for its Prime members.