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America’s Roundup: Dollar hits fresh 2-1/2 month low, Wall Street drops, Gold little changed, Oil prices rise on nagging fears of fuel shortages-May 12th,2021

Posted at 11 May 2021 / Categories Market Roundups


Market Roundup

•Brazil Apr CPI (YoY)  6.76%,6.76% forecast,6.10% previous

•Brazil Apr CPI (MoM)  0.31%,0.30% forecast,0.93% previous

•US Redbook (YoY) 13.3%, 14.2% previous

 • US Mar JOLTs Job Openings   8.123M, 7.500M forecast, 7.367M previous

Looking Ahead - Economic events and other releases (GMT)

•23:50 Japan Apr Foreign Reserves (USD)  1,368.5B previous

•00:00 Australia HIA New Home Sales (MoM) 90.3% previous

•00:30 Australia May Westpac Consumer Sentiment  6.2% previous

•00:30 Australia Building Approvals (MoM) 17.4% previous

•05:00 Japan Mar Coincident Indicator (MoM)  -1.8% previous

•05:00 Japan Mar Leading Index (MoM)  0.6% previous

Looking Ahead - Economic events and other releases (GMT)

•No events ahead

Currency Summaries

EUR/USD: The euro edged higher against dollar on Monday after data showed German investor sentiment surged to its highest level in May since the start of the COVID-19 pandemic. The ZEW economic research institute said its survey of investors' economic sentiment rose to 84.4 points from 70.7 the prior month. The last time it hit a higher level was in February 2000. The euro's gains were also bolstered by widespread dollar weakness as investors waited for comments on U.S. policymaker thinking ahead of inflation data on Wednesday. Immediate resistance can be seen at 1.2186 (23.6%fib), an upside break can trigger rise towards 1.2208 (Higher BB).On the downside, immediate support is seen at 1.2110 (5DMA), a break below could take the pair towards 1.2087 (38.2%fib).

GBP/USD: Sterling steadied above $1.41 on Tuesday as market relief over Scottish election results, improved economic forecasts, and lockdown easing measures supported sterling across the board. Pro-independence parties won a majority in Scotland’s parliament on Saturday, which Scottish leader Nicola Sturgeon said gave her a mandate to pursue plans for a second independence referendum. Any second referendum on Scottish independence requires the approval of the British government and Prime Minister Boris Johnson has ruled this out. At 11:40 GMT, the pound was up 0.21% against the dollar at $1.4146. Immediate resistance can be seen at 1.4175  (23.6%fib), an upside break can trigger rise towards 1.4200 (Psychological level).On the downside, immediate support is seen at 1.4068(38.2%fib), a break below could take the pair towards 1.4005(5DMA).

USD/CAD: The Canadian dollar edged higher against its U.S. counterpart on Tuesday as weaker dollar and higher commodity prices boosted Canadian dollar. Markets were broadly trading in narrow ranges by looming U.S. consumer price figures due on Wednesday, as traders worried that a big number might prompt the Fed to wind back monetary policy support sooner than expected. Markets expect U.S. year-on-year inflation to hit 3.6% in April, juiced by the base effect of a pandemic year contraction. The Canadian dollar was trading up 0.02% at 1.2096 to the greenback .Immediate resistance can be seen at 1.2146(5 DMA), an upside break can trigger rise towards 1.2236 (11DMA).On the downside, immediate support is seen at 1.2073 (23.6%fib), a break below could take the pair towards 1.2040 (Lower BB).

USD/JPY: The dollar declined against the yen on Tuesday as investors bet that rising inflation would erode the currency's value as the U.S. Federal Reserve maintains its loose monetary policy.The five-year breakeven inflation rate  which measures expectations of inflation five years out - reached its highest since April 2011 on Monday.A weaker-than-expected jobs report on Friday helped persuade market participants that the Fed would keep rates low and continue purchasing assets, even if inflation rises. Strong resistance can be seen at 108.80 (38.2%fib), an upside break can trigger rise towards 109.29(23.6%fib).On the downside, immediate support is seen at 108.45 (38.2%fib), a break below could take the pair towards 18.07 (61.8%fib).

Equities Recap

European stocks tumbled from all-time highs on Tuesday, with the travel, retail and technology sectors among the top losers after global sentiment turned risk-averse on worries about rising inflation in the United States.

UK's benchmark FTSE 100 closed down by  2.47 percent, Germany's Dax ended down by 1.82 percent, France’s CAC finished the day down by 1.86 percent.                

U.S. stocks fell on Tuesday as speculation that rising inflation pressure could prompt interest rate hikes sooner rather than later dragged on shares and hobbled the dollar, which struggled at a 2-1/2-month low.

Dow Jones closed down by 1.36 %percent, S&P 500 closed down by 0.87% percent, Nasdaq settled down  by  0.09% percent.

Treasuries Recap

U.S. Treasury yields climbed on Tuesday as inflation concerns helped drive a sell-off in equity markets while investors girded for a closely watched reading on consumer prices on Wednesday.

 Yields on longer-dated Treasuries were up for a third straight day, with the yield on 10-year Treasury note up 2.1 basis points at 1.624%.

Commodities Recap

Gold prices were subdued on Tuesday as rising U.S. Treasury yields countered support from a weaker dollar and investors awaited U.S. consumer price data to gauge inflation.

Gold prices were subdued on Tuesday as rising U.S. Treasury yields countered support from a weaker dollar and investors awaited U.S. consumer price data to gauge inflation.

Spot gold fell by as much as 1% to a session low of$1,816.90 per ounce before paring losses and was down 0.1% at $1,834.19 per ounce by 1:43 p.m. EDT (1743 GMT).U.S. gold futures settled down 0.1% at $1,836.1.

Oil prices settled higher on Tuesday, as lingering fears of gasoline shortages due to an outage at the largest U.S. fuel pipeline system after a cyber attack brought futures back from an early drop of more than 1%.

Brent crude futures rose 23 cents, or 0.3%, to settle at $68.55 a barrel while U.S. West Texas Intermediate (WTI) crude futures rose 36 cents, or 0.6%, to end the session at $65.28.


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