FOREX-The U.S dollar hit a fresh three-month high

The U.S dollar hit a fresh three-month high versus other major currencies today, as traders wagered strong U.S labor data could lift it even further. The dollar index is on track for a further weekly gain - it's fourth in five weeks - of nearly 1%. It gained 0.1% on the day, hitting 92.699. The greenback has strengthened broadly since the U.S. Federal Reserve surprised markets last month by signaling it could tighten policy earlier than expected to curb inflation. The U.S. jobs report is due later today and is forecast to show a solid rise of 700,000, with traders braced for any surprises. The FX markets have certainly become more sensitive to incoming US economic data. That suggests to us that positioning in FX could still be short US dollars which are resulting in this further extension of dollar strength. A higher number in the employment report could fuel concerns of tighter Fed policy. The dollar has started July strongly; a U.S non-farm payrolls meet or beat today would maintain that momentum. Many people are now arguing over whether the dollar has indeed bottomed because at some point in 2023 the Fed is suggesting that it could be raising interest rates. Also, there's some nervousness about whether the dollar's going to start to behave in a more pro-cyclical manner, that is if the data is stronger than expected in the U.S. that the dollar really gets more strength from that. Euro edged lower with investors on hold ahead of U.S jobs data which might affect the Federal Reserve’s narrative about the economy and its monetary policy stance. More dovish signals came from the European Central Bank (ECB) with President Christine Lagarde saying the euro zone’s economy is beginning to rebound from a pandemic-induced slump but this recovery remains fragile. Meanwhile, concerns about the impact on the global economy of a possible monetary tightening in China and of the Delta variant are expected to keep risk sentiment on hold. Sterling fell yesterday after Bank of England Governor Andrew Bailey warned against over-reaction to rising inflation in Britain. Bailey said in his annual Mansion House speech that it was important to ensure that the recovery was not undermined by a premature tightening in monetary conditions, as a rise in inflation was likely to be temporary.

Euro

The single currency edged lower today with investors on hold ahead of U.S jobs data which might affect the Federal Reserve’s narrative about the economy and its monetary policy stance. More dovish signals came from the ECB President saying the euro zone’s economy is beginning to rebound from a pandemic-induced slump but this recovery remains fragile. Overall, the EUR/USD traded with a low of 1.1916 and a high of 1.1955 before closing the day around 1.1930 in the New York session.

Yen

The Japanese Yen trading within narrow ranges as investors looked to U.S nonfarm payrolls reports for clues on whether the Federal Reserve will start to reduce monetary stimulus sooner rather than later. Increased vaccinations that have led to more robust economic activity have helped the U.S recovery from the pandemic. Overall, the USD/JPY traded with a low of 110.67 and a high of 111.09 before closing the day around 110.84 in the U.S session.

British Pound

The British Pound fell after BoE Governor Andrew Bailey warned against over-reaction to rising inflation in Britain. Sterling was one of the worst-performing G-10 currencies last week after the BoE kept the size of its stimulus program unchanged and said inflation would surpass 3%, but that the climb further above its 2% target would be only temporary. Overall, the GBP/USD traded with a low of 1.3888 and a high of 1.3984 before closing the day at 1.3920 in the New York session.

Canadian Dollar

The Canadian Dollar may strengthen over the coming year, bolstered by higher oil prices and reduced stimulus from the Bank of Canada, but gains could stop short of the currency's recent six-year high, a Reuters poll showed. Canada is a major exporter of commodities, including oil, so the loonie is particularly sensitive to the global economic outlook. Overall, USD/CAD traded with a low of 1.2279 and a high of 1.2338 before closing the day at 1.2321 in the New York session.

Australian Dollar

The Australian Dollar traded slightly weaker in a subdued session today, as investors remained on edge ahead of the much-anticipated U.S employment report due later in the day. Data showed that Australian banks’ lending to investors for homes spiked 13.3% in May, a metric that analysts said was a portent of policy tightening by regulators amid sky-rocketing house prices. Overall, AUD/USD traded with a low of 0.7458 and a high of 0.7505 before closing the day at 0.7468 in the New York session.

Euro-Yen

EUR/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 45 and lies above the neutral zone. In general, the pair has lost 0.04%.

Sterling-Yen

Currently, GBP/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 46 reading and lies above the neutral zone. On the whole, the pair has lost 0.37%.

Aussie-Yen

Currently, the cross is trading above 14, 50, and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 40 reading and lies above the neutral region. In general, the pair has gained 0.02%.

Euro-Sterling

This cross is currently trading below 14, 50, and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 50 and lies below the neutral region. Overall, the pair has gained 0.34%.

Sterling-Swiss

This cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 49 and lies below the neutral region. In general, the pair has lost 0.32%.

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

Daily Market View-U.S Stock Market

Wall Street was muted yesterday and the S&P teased its fifth straight record closing high as investors ended the month and the quarter by largely shrugging off positive economic data and looking toward Friday’s highly anticipated employment report. The indexes were languid and range-bound, with the blue-chip Dow posting modest gains, while the S&P 500 and the NASDAQ stayed relatively close to the starting gate. The news is sanguine and therefore we’re not seeing big swings. For the month, the bellwether S&P 500 was set to notch its fifth consecutive advance, while the Dow was on track to snap its four-month winning streak. The NASDAQ was on course for a green June. This month, investor appetite shifted away from economically sensitive cyclical in favor of growth stocks. All three indexes were on pace for their fifth consecutive quarterly gains, and the S&P 500 is on track to register its second-best first-half performance since 1998, rising 14.3%.

Dow Jones Industrial Average

The Dow Jones Industrial Average rose 0.61%. The best performers of the session on the Dow Jones Industrial Average were Walmart Inc., which rose 2.72% or 3.73 points to trade at 141.03 at the close. Meanwhile, Goldman Sachs Group Inc. added 1.84% or 6.84 points to end at 379.46 and Boeing Co was up 1.61% or 3.80 points to 239.56 in late trade. The worst performers of the session were Intel Corporation, which fell 1.09% or 0.62 points to trade at 56.13 at the close. Nike Inc. declined 0.93% or 1.45 points to end at 154.50 and Visa Inc. Class A was down 0.80% or 1.88 points to 234.07.

NASDAQ 100

 The NASDAQ index fell 0.17%. The top performers on the NASDAQ Composite were Cuentas Inc. which rose 120.86% to 6.140, Newegg Commerce Inc. which was up 77.64% to settle at 19.31, and Borqs Technologies Inc. which gained 43.70% to close at 1.4300. The worst performers were BSQUARE Corporation which was down 40.98% to 4.745 in late trade, Altimmune Inc. which lost 37.92% to settle at 9.87, and Marin Software Inc. which was down 37.69% to 10.78 at the close.

Oil

Oil prices rose today, supported by lower U.S inventories and the prospect of strengthening demand, while investors awaited a decision from OPEC+ producers on whether they would maintain or reduce supply cuts in the second half of the year. U.S West Texas Intermediate crude was up 88 cents, or 1.2%, at $74.35. WTI rose more than 10% in June while Brent added more than 8%, touching their highest levels since October 2018. Analysts expect oil demand to gather pace in the second half of the year as more people are vaccinated against COVID-19 and travel restrictions are eased. The OPEC+ group of oil producers meets today to decide on a further easing of output cuts next month and could also consider extending its overall supply pact beyond April 2022, sources within the group told Reuters. Sideline discussions indicate that Russia is proposing to boost supply while Saudi Arabia wants a more cautious approach. In the United States, crude stockpiles fell last week for the sixth straight week.

Precious and Base Metals

Gold prices rose today as concerns over the more infectious Delta variant of COVID-19 bolstered its safe-haven appeal, ahead of U.S jobs data seen as crucial to the Federal Reserve’s policy outlook. Spot gold gained 0.4% to $1,776.40 per ounce and U.S gold futures climbed 0.4% to $1,776.50. While the market is concerned about rate hikes going into the non-farm payrolls data, the spread of the Delta variant globally is supporting gold prices. Rising cases of the Delta variant have prompted France to delay the easing of restrictions in the Landes region, while infections have also surged in Asia. Investors are now awaiting the U.S. non-farm payrolls (NFP) report due on Friday for clues on the Fed’s next step. The Fed is keen on signs of continued strength in the jobs market as a guide to tapering. The ADP data was better than expected and if that feeds into the NFP data this week, then gold may weaken again as the case for ‘tapering’ is stronger. Gold has held well at current levels but has yet to break out of the ongoing consolidation. Federal Reserve Bank of Dallas President Robert Kaplan said on Wednesday he would like the Fed to start reducing its support for the economy before the end of the year, in part to make an abrupt policy tightening less likely later on. A Fed rate hike will increase the opportunity cost of holding bullion, dulling its appeal. Silver rose 0.4% to $26.22 per ounce, palladium fell 1% to $2,751.5 and platinum gained 0.1% to $1,073.5. Copper yesterday was on track for its biggest monthly fall since March 2020 as a stronger dollar, the threat of tighter U.S monetary policy and moves by China to keep a lid on prices pulled the metal from record highs. Many analysts say rising demand for copper in infrastructure and electrification will cause shortages and higher prices in the coming years.

Traditional Agricultures

Soybean futures surged yesterday after the U.S Department of Agriculture surprised traders with lower-than-expected plantings estimates and inventory data. Corn climbed by their daily exchange-imposed limit after USDA pegged plantings of the crop at 92.692 million acres, below analysts’ expectations for 93.787 million. There is simply no margin of error for bad weather, and we do have bad weather.

Wall Street was muted yesterday and the S&P teased its fifth straight record closing high as investors ended the month and the quarter by largely shrugging off positive economic data and looking toward Friday’s highly anticipated employment report. The indexes were languid and range-bound, with the blue-chip Dow posting modest gains, while the S&P 500 and the NASDAQ stayed relatively close to the starting gate. The news is sanguine and therefore we’re not seeing big swings. For the month, the bellwether S&P 500 was set to notch its fifth consecutive advance, while the Dow was on track to snap its four-month winning streak. The NASDAQ was on course for a green June. This month, investor appetite shifted away from economically sensitive cyclicals in favor of growth stocks. All three indexes were on pace for their fifth consecutive quarterly gains, and the S&P 500 is on track to register its second-best first-half performance since 1998, rising 14.3%.

Dow Jones Industrial Average

 The Dow Jones Industrial Average rose 0.61%. The best performers of the session on the Dow Jones Industrial Average were Walmart Inc., which rose 2.72% or 3.73 points to trade at 141.03 at the close. Meanwhile, Goldman Sachs Group Inc. added 1.84% or 6.84 points to end at 379.46 and Boeing Co was up 1.61% or 3.80 points to 239.56 in late trade. The worst performers of the session were Intel Corporation, which fell 1.09% or 0.62 points to trade at 56.13 at the close. Nike Inc. declined 0.93% or 1.45 points to end at 154.50 and Visa Inc. Class A was down 0.80% or 1.88 points to 234.07.

NASDAQ 100

The NASDAQ index fell 0.17%. The top performers on the NASDAQ Composite were Cuentas Inc. which rose 120.86% to 6.140, Newegg Commerce Inc. which was up 77.64% to settle at 19.31 and Borqs Technologies Inc. which gained 43.70% to close at 1.4300. The worst performers were BSQUARE Corporation which was down 40.98% to 4.745 in late trade, Altimmune Inc. which lost 37.92% to settle at 9.87 and Marin Software Inc. which was down 37.69% to 10.78 at the close.

Oil

Oil prices rose today, supported by lower U.S inventories and the prospect of strengthening demand, while investors awaited a decision from OPEC+ producers on whether they would maintain or reduce supply cuts in the second half of the year. U.S West Texas Intermediate crude was up 88 cents, or 1.2%, at $74.35. WTI rose more than 10% in June while Brent added more than 8%, touching their highest levels since October 2018. Analysts expect oil demand to gather pace in the second half of the year as more people are vaccinated against COVID-19 and travel restrictions are eased. The OPEC+ group of oil producers meets today to decide on a further easing of output cuts next month and could also consider extending its overall supply pact beyond April 2022, sources within the group told Reuters. Sideline discussions indicate that Russia is proposing to boost supply while Saudi Arabia wants a more cautious approach. In the United States, crude stockpiles fell last week for the sixth straight week.

Precious and Base Metals

Gold prices rose today as concerns over the more infectious Delta variant of COVID-19 bolstered its safe-haven appeal, ahead of U.S jobs data seen as crucial to the Federal Reserve’s policy outlook. Spot gold gained 0.4% to $1,776.40 per ounce and U.S gold futures climbed 0.4% to $1,776.50. While the market is concerned about rate hikes going into the non-farm payrolls data, the spread of the Delta variant globally is supporting gold prices. Rising cases of the Delta variant have prompted France to delay the easing of restrictions in the Landes region, while infections have also surged in Asia. Investors are now awaiting the U.S. non-farm payrolls (NFP) report due on Friday for clues on the Fed’s next step. The Fed is keen on signs of continued strength in the jobs market as a guide to tapering. The ADP data was better than expected and if that feeds into the NFP data this week, then gold may weaken again as the case for ‘tapering’ is stronger. Gold has held well at current levels but has yet to break out of the ongoing consolidation. Federal Reserve Bank of Dallas President Robert Kaplan said on Wednesday he would like the Fed to start reducing its support for the economy before the end of the year, in part to make an abrupt policy tightening less likely later on. A Fed rate hike will increase the opportunity cost of holding bullion, dulling its appeal. Silver rose 0.4% to $26.22 per ounce, palladium fell 1% to $2,751.5 and platinum gained 0.1% to $1,073.5. Copper yesterday was on track for its biggest monthly fall since March 2020 as a stronger dollar, the threat of tighter U.S monetary policy and moves by China to keep a lid on prices pulled the metal from record highs. Many analysts say rising demand for copper in infrastructure and electrification will cause shortages and higher prices in the coming years.

Traditional Agricultures

Soybean futures surged yesterday after the U.S Department of Agriculture surprised traders with lower-than-expected plantings estimates and inventory data. Corn climbed by their daily exchange-imposed limit after USDA pegged plantings of the crop at 92.692 million acres, below analysts’ expectations for 93.787 million. There is simply no margin of error for bad weather, and we do have bad weather.

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

Market Update: GER30 Remains Hemmed at Resistance

Today we’re looking at the daily GER30 as buyers continue to stall from key resistance. This level remains a key obstacle for the current uptrend.

Key resistance has continued to develop from 15,755 on the GER30 and overnight we saw the latest failed attempt from buyers to beat the level after sellers faded the move once price entered. For, now, there looks to be plenty of fresh supply waiting for buyer moves.  Buyers look to be continuing to grind the current trend higher but until we see a break consolidation could continue as price tries to work out who holds control. Adding to the picture is an ascending triangle pattern that remains in play. These patterns in uptrends are normally seen as bullish continuation patterns but breakout confirmation is required to give the trader direction bias.

Today’s session will be a focus for us, will we see price continue to consolidate? A break higher that can close above resistance suggests buyers hold momentum and that we could see the overall uptrend continue. A break lower out of the current ascending triangle pattern could be a warning that sellers could be looking to test out buyer confidence.

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

FOREX-Pulse of the Market

The dollar is headed for its best monthly rise since March today, supported by traders' trepidation ahead of unpredictable U.S labor data and by concern that the spread of the Delta coronavirus variant could delay the pandemic recovery. The dollar has gained about 2.5% against a basket of currencies this month, mostly in the wake of a surprisingly hawkish shift in the Federal Reserve's rates outlook. Traders think it could move sharply in either direction if labor data this week provides clues as to the pressure on policymakers. Today, risk-sensitive and commodity-exposed currencies nursed the largest losses, after the Australian and New Zealand dollars had fallen about 0.7% against the dollar yesterday and the Canadian dollar had lost about 0.5%. They were steady in the Asia session, as were the safe-havens of Japanese yen and the Swiss franc which held their own through Tuesday. That left the euro at $1.1900, the yen at 110.49 per dollar, and the Aussie at $0.7518 - all within sight of recent milestone lows against the dollar. Currency markets seemed to be in transition from closely tracking the ebb and flow of risk sentiment towards a greater sensitivity to interest rates, driving a shakeout that has lifted the dollar. There's been a lot of speculative build-up of short dollar positions over the last couple of months and we think that these are being washed out. Indeed, data showed the sharpest fall in the value of bets against the dollar in three months occurred last week, a boost for the greenback as the shorts buy dollars to close positions. The U.S. dollar index, which measures the greenback against a basket of six major currencies, was steady at 92.041 after touching a one-week high of 92.194 on Tuesday. It has gained 2.5% through June. A test of the near-term dollar outlook arrives this week with U.S labor data. Signs of strength could add to inflationary pressure on policymakers to move sooner on rate hikes, while a miss might put some padding into the timeline. Private payrolls are due later today, but the main focus is on more comprehensive labor figures due on Friday.

Euro

The single currency fell yesterday as the U.S dollar rose to a one-week peak, posting its largest single daily gain in roughly two weeks, as new coronavirus outbreaks threatened to derail a global economic recovery. The euro declined 0.2% to $1.1896, edging back toward the 2-1/2-month low touched on June 18. Overall, the EUR/USD traded with a low of 1.1916 and a high of 1.1955 before closing the day around 1.1930 in the New York session.

Yen

The Japanese Yen fell against the U.S Dollar yesterday. Japanese lawmakers earned an average of 24.16 million yen ($218,600) in income last year, down 110,000 yen from 2019, parliamentary data showed earlier today, with the salary of Diet members cut by 20 percent since May 2020 amid the coronavirus pandemic. Overall, the USD/JPY traded with a low of 110.67 and a high of 111.09 before closing the day around 110.84 in the U.S session.

British Pound

The British Pound sank to its lowest in over a week against the dollar yesterday, with the British currency on track for its worst month since September. A broad strengthening in the dollar in recent weeks after a surprise hawkish shift by the U.S Federal Reserve has brought some volatility back to currency markets. Overall, the GBP/USD traded with a low of 1.3888 and a high of 1.3984 before closing the day at 1.3920 in the New York session.

Canadian Dollar

The Canadian Dollar weakened yesterday for a second day against its broadly stronger U.S counterpart as new coronavirus outbreaks in Asia pressured commodity-linked currencies and investors awaited key economic data later in the week. Canadian GDP data for April is due today and the U.S nonfarm payroll report on Friday. Overall, USD/CAD traded with a low of 1.2279 and a high of 1.2338 before closing the day at 1.2321 in the New York session.

Australian Dollar

The Australian Dollar fell through trade yesterday, drifting toward 0.7510 despite an improved demand for risk and rising commodity prices. With little catalyst for the AUD sell-off, we can only point to increasing uncertainty surrounding the emergence of the COVID-19 Delta variant, particularly across Europe and emerging markets. Overall, AUD/USD traded with a low of 0.7552 and a high of 0.7599 before closing the day at 0.7565 in the New York session.

Euro-Yen

EUR/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 43 and lies above the neutral zone. In general, the pair has lost 0.04%.

Sterling-Yen

Currently, GBP/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 44 reading and lies above the neutral zone. On the whole, the pair has lost 0.37%.

Aussie-Yen

Currently, the cross is trading above 14, 50, and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 43 reading and lies above the neutral region. In general, the pair has gained 0.02%.

Euro-Sterling

This cross is currently trading below 14, 50, and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 49 and lies below the neutral region. Overall, the pair has gained 0.34%.

Sterling-Swiss

This cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 52 and lies below the neutral region. In general, the pair has lost 0.32%.

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

Daily Market View-U.S Stock Market

The S&P 500 hit a record high for the fourth straight session yesterday, helped by shares of heavyweight technology firms and banks, while an upbeat consumer confidence report set a positive tone for the key jobs report at the end of the week. U.S consumer confidence increased in June to its highest level since the COVID-19 pandemic started more than a year ago, bolstering expectations for strong economic growth in the second quarter. Market participants are closely watching the non-farm payroll report on Friday that could pave way for the U.S. Federal Reserve’s policy stance which hinges on an equitable recovery of the labor market. Ten of the 11 major S&P sectors rose in early trading, with energy, materials, and industrials among the top gainers after lagging in the past few sessions. All the three major Wall Street indexes are set for their fifth straight quarter of gains, boosted by ultra-loose monetary policy, a rebounding U.S economy, and robust corporate earnings.

Dow Jones Industrial Average

 The Dow Jones Industrial Average added 0.03%. The biggest gainers of the session on the Dow Jones Industrial Average were Nike Inc., which rose 2.38% or 3.62 points to trade at 155.98 at the close. Home Depot Inc. added 1.26% or 3.97 points to end at 318.25 and Apple Inc. was up 1.15% or 1.55 points to 136.33 in late trade. The biggest losers included Boeing Co, which lost 1.75% or 4.19 points to trade at 235.77 in late trade. Walt Disney Company declined 1.51% or 2.66 points to end at 173.91 and Intel Corporation shed 1.25% or 0.72 points to 56.76.

NASDAQ 100

The NASDAQ index gained 0.19%. The top performers on the NASDAQ were BSQUARE Corporation which rose 206.11% to 8.020, Cerevel Therapeutics Holdings Inc. which was up 134.69% to settle at 29.50 and Marin Software Inc. which gained 129.47% to close at 17.2100. The worst performers were DiaMedica Therapeutics Inc. which was down 33.89% to 4.740 in late trade, ReShape Lifesciences Inc. which lost 28.27% to settle at 5.480, and Mediwound Ltd which was down 28.01% to 4.060 at the close.

Oil

Oil prices today extended the previous day's small gains after an industry report showed U.S crude stockpiles fell last week, overriding trader and investor concerns about transportation curbs in some countries as COVID-19 cases surge. U.S crude was up 41 cents, or 0.6% at $73.39 a barrel, having risen 0.1% in the previous session. While the highly contagious Delta variant of the coronavirus is taking hold in many countries, prompting new lockdowns or movement restrictions from Australia to Portugal, hopes of a broader recovery in demand for fuel remained intact. On the last day of June, U.S crude is heading for another monthly gain, which would mean the contract has risen for six out of the last seven months. Crude stocks in the United States were down by 8.2 million barrels, American Petroleum Institute data showed, according to two sources, who spoke on condition of anonymity. Still, gasoline inventories rose by 2.4 million barrels and distillate stocks were up by 428,000 barrels.

Precious and Base Metals

Gold prices held steady today as investors were cautious ahead of U.S jobs data due later this week, but prices were set to post their worst month since November 2016 on the U.S Federal Reserve’s shift to a hawkish policy stance. Spot gold was steady at $1,761.80 per ounce. U.S gold futures fell 0.1% to $1,761.80. For the month, prices were down 7.6%. For the quarter, gold had risen 3.2%. Federal Reserve Governor Christopher Waller on Tuesday said he is “very optimistic” about the economy, and while he declined to say when he thinks the Fed should start raising interest rates, he said it could be next year. U.S consumer confidence jumped to its highest level in nearly 1-1/2 years in June as growing labor market optimism amid a reopening economy offset concerns about higher inflation. The U.S Labor Department’s nonfarm payrolls data on Friday is expected to show a gain of 690,000 jobs this month, compared with 559,000 in May, according to a Reuters poll. Gold is seen as a hedge against inflation, although a Fed rate hike will increase the opportunity cost of holding bullion and dull its appeal. Silver rose 0.3% to $25.81 per ounce. Palladium gained 0.4% at $2,686.81 and was headed for a fourth straight quarterly gain. Platinum rose 0.2% to $1,068.96 and was set to post its worst quarter and month since March last year. Copper prices rose today but were set for their smallest quarterly gain since March 2020 on pressure from a firm dollar and top consumer China’s efforts to tame a red-hot metals rally. Copper prices have pulled back in recent weeks after hitting a record high in May on the back of a global economic recovery, rising investments into renewable energy and electric vehicles, as well as a tight supply outlook. Some of the pressure has come from China, with the world’s second-largest economy releasing state reserves of copper.

Traditional Agricultures

Soybean futures edged higher today, as traders adjusted positions ahead of a U.S government report on stock and acreage, while corn prices eased. Wheat futures ticked higher although expectations of strong output in Russia, the world’s biggest exporter, capped gains.

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

FOREX-Pulse of the Market

The dollar hovered below a two-month high versus major counterparts today, with traders largely sidelined ahead of a closely watched U.S. jobs report, which could sway the timing of an exit from Federal Reserve stimulus. The dollar index, which tracks the greenback against a basket of six major currencies, was at 91.884 early in the Asian session after retreating from as high as 92.408 on June 18, in the week the Federal Open Market Committee shocked markets by predicting two interest rate hikes by end-2023. The Fed commentary since then has put the focus on the data to determine when tapering of asset purchases and higher rates are appropriate, with Chair Jerome Powell saying a weak ago that policymakers won't act on just the "fear" of inflation, and will encourage a "broad and inclusive" job market recovery. The U.S. Labor Department is expected to report a gain of 690,000 jobs in June, compared with 559,000 in May, and an unemployment rate of 5.7% versus 5.8% in the previous month, according to a Reuters poll of economists. Investors are also looking at U.S consumer confidence data today as well as the Institute for Supply Management's manufacturing index on Thursday for clues as to where interest rates are headed. Both the dollar and yen benefited from some safe-haven demand as the more contagious Delta strain of the novel coronavirus spread in Asia and elsewhere, stoking fears of further lockdowns. The market had been positioned long of the single currency on optimism regarding the vaccine catch-up trade in the region but forecasts that the Delta variant of COVID could spread through Europe in the summer months could now be undermining confidence in this trade. Assuming the U.S. data remains broadly supportive, we expect the USD to grind moderately higher vs. the EUR through the course of the year. Sterling rose yesterday as traders brace for the end of the worst month versus the dollar since September, with the focus moving to political risks this week. Sterling was one of the worst-performing G-10 currencies last week after the Bank of England kept the size of its stimulus program unchanged.

Еuro

The single currency nudged lower yesterday, with investors awaiting direction from key economic data later in the week. Euro-dollar implied volatility gauges with a one-year maturity were close to their lowest since March 2020. Currency markets were generally quiet, with the U.S. dollar index up 0.2% on the day. Overall, the EUR/USD traded with a low of 1.1916 and a high of 1.1955 before closing the day around 1.1930 in the New York session.

Yen

The Japanese Yen benefited from some safe-haven demand as the more contagious Delta strain of the novel coronavirus spread in Asia and elsewhere, stoking fears of further lockdowns. Investors are also looking at U.S consumer confidence data today as well as the Institute for Supply Management's manufacturing index on Thursday. Overall, the USD/JPY traded with a low of 110.67 and a high of 111.09 before closing the day around 110.84 in the U.S session.

British Pound

The British Pound rose as traders brace for the end of the worst month since September, with the focus moving to political risks this week. This month, sterling dropped for the first time since April below $1.38 against a strengthening dollar after the U.S Federal Reserve surprised markets by signaling it would raise interest rates sooner than expected. Overall, the GBP/USD traded with a low of 1.3888 and a high of 1.3984 before closing the day at 1.3920 in the New York session.

Canadian Dollar

The Canadian Dollar weakened against its U.S counterpart yesterday as investors weighed rising coronavirus cases in Australia and Asia, with the currency giving back some of last week's advance. Canada's GDP report for April is due later today which could offer clues on the strength of the economy. Overall, USD/CAD traded with a low of 1.2279 and a high of 1.2338 before closing the day at 1.2321 in the New York session.

Australian Dollar

The Australian Dollar weakened today after cautious investors cut down on risk amid concerns over rising COVID-19 cases and as the greenback strengthened on growing bets of higher U.S interest rates. The Aussie fell sharply overnight after Boston Federal Reserve President Eric Rosengren raised the chances of higher interest rates to manage the rapid gains seen in the U.S. housing market. Overall, AUD/USD traded with a low of 0.7552 and a high of 0.7599 before closing the day at 0.7565 in the New York session.

Euro-Yen

EUR/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 43 and lies above the neutral zone. In general, the pair has lost 0.04%.

Sterling-Yen

Currently, GBP/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 44 reading and lies above the neutral zone. On the whole, the pair has lost 0.37%.

Aussie-Yen

Currently, the cross is trading above 14, 50, and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 43 reading and lies above the neutral region. In general, the pair has gained 0.02%.

Euro-Sterling

This cross is currently trading below 14, 50, and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 49 and lies below the neutral region. Overall, the pair has gained 0.34%.

Sterling-Swiss

This cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 52 and lies below the neutral region. In general, the pair has lost 0.32%.

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.