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GBPUSD hits 13-month low on IndyRef2

 

“See things in the present, even if they are in the future.” — Larry Ellison 

 

 

HEADLINES

 

Pound slammed by prospect of new Scottish independence vote 

Gold eases as dollar resumes rally in run up to Fed decision

Natural gas plummets as Freeport delays facility restart following explosion

Wall Street slips heading into Fed's big rate decision

Bitcoin hovers near MicroStrategy 'margin call' price

EUR/USD to retest its recent low in the 1.0350 area – Rabobank

GBPUSD Near Term: Downside favored

 

 

FOREX

 

CURRENCIES

 

Pound slammed by prospect of new Scottish independence vote 

 

Sterling plunged on Tuesday to a 13-month low versus the euro and fell below $1.20 for the first time since the start of the pandemic after Scotland's First Minister Nicola Sturgeon said she was set to share details on plans for a new independence referendum. 

Sturgeon said she was nearly ready to give more details on how Scotland's devolved parliament could move ahead with a new independence referendum without the consent of the British government.

 

 

COMMODITIES

 

 

Gold eases as dollar resumes rally in run up to Fed decision

 

Gold gave up small gains in range-bound trading on Tuesday as the dollar resumed its climb and hit a 20-year high, eroding bullion’s safe-haven appeal on investor bets of aggressive rate hikes by the U.S. Federal Reserve.

Spot gold fell 0.4% to $1,811.59 per ounce by 1:54 p.m. EDT (1754 GMT), while U.S. gold futures settled down 1% at $1,813.50.

Other data showed the producer price index for final demand rose 0.8% in May after advancing 0.4% in April, the Labor Department said, in line with expectations.

 

 

ENERGY

 

 

Natural gas plummets as Freeport delays facility restart following explosion

 

 

Natural gas prices plunged on Tuesday, after Freeport LNG said its facility that had a fire last week likely won’t be back up and running soon.

U.S. natural gas fell about 16% to $7.22 per million British thermal units (MMBtu).

Surging prices are adding to inflationary pressures across the economy. Drivers are already grappling with record prices at the pump with the national average for a gallon of gas topping $5 over the weekend, and now utility bills are also set to rise.

 

 

STOCKS

 

 

Wall Street slips heading into Fed's big rate decision 

 

U.S. stocks on Tuesday extended losses from a bruising previous session in which the S&P 500 confirmed a bear market as investors braced for an aggressive interest rate hike by the Federal Reserve this week. 

The U.S. central bank is expected to raise rates by 75 basis points on Wednesday after a hotter-than-anticipated rise in consumer prices in May.

Shares on Wall Street's main indexes have lost between 16% and 30% of their value this year amid economic uncertainty stoked by supply chain and labor shortages, soaring inflation, the fallout of Ukraine war and an aggressive monetary policy.

 

 

Bitcoin hovers near MicroStrategy 'margin call' price 

 

 

Bitcoin neared a price level on Tuesday that could force software firm MicroStrategy Inc (MSTR.O) to add more tokens against a bitcoin-backed loan or trigger selling some of its vast holdings, setting fragile cryptocurrency markets on edge. 

MictroStrategy, an aggressive investor in bitcoin, said it borrowed $205 million from crypto bank Silvergate Capital (SI.N) in March, with the three-year loan mostly secured against some 19,466 bitcoins.

 

 

ANALYSIS

 

 

EUR/USD to retest its recent low in the 1.0350 area – Rabobank 

 

“The US now has an inflation rate of 8.6% and over the past couple of sessions, speculation has been building that the Fed will be willing to up the ante at this week’s policy meeting. Expectations of a 75 bps hike have been on the rise for June and a more aggressive pace of rate hikes is now expected through the remainder of the year. The implication is that the USD could be stronger for longer.”

“We remain of the view that EUR/USD has the capacity to retest its recent low in the 1.0350 area and in line with this maintain a one and three-month forecast of EUR/USD 1.03.”

“By the end of this year, it seems likely that the market will increasingly be focussed on 2023 US recession risks. In reflection of this our forecast profile for the USD has for some time outlined a weaker USD on a six to 12-month view. However, in Q2 we moderated how much ground the USD is likely to give back this year. Our 12-month forecast for EUR/USD stands at 1.10.” 

 

 

CHART

 

 

GBPUSD Near Term: Downside favored

Technical View: Short position below 1.221. Target 1.196. Conversely, break above 1.221, to open 1.228.

Comments: The pair breaks below support.

 

 

 

 

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

 

 

 

 

Source: FX Street Economic Calendar

 

 

Footnotes
https://www.reuters.com/markets/europe/sterling-rises-against-dollar-after-uk-job-data-2022-06-14/
https://www.reuters.com/article/global-precious/precious-gold-eases-as-dollar-resumes-rally-in-run-up-to-fed-decision-idUSL4N2Y12YM
https://www.reuters.com/markets/commodities/oil-bounces-around-tight-supply-offsets-china-recession-fears-2022-06-14/
https://www.reuters.com/markets/europe/futures-edge-higher-after-mondays-rout-wall-street-2022-06-14/
https://www.reuters.com/technology/bitcoin-nears-microstrategy-margin-call-price-2022-06-14/
https://www.fxstreet.com/news/eur-usd-to-retest-its-recent-low-in-the-10350-area-rabobank-202206140908
 

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