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GBP/USD hits 2-year low

“When you find an idea that you just can’t stop thinking about, that’s probably a good one to pursue.” — Josh James 

 

 

HEADLINES

 

 

  • Weak economic data sends sterling to new lows against dollar 
  • Gold prices slide more than 1% as dollar rises
  • Oil rises as supply concerns outweigh reduced demand, recession risks
  • Dow falls more than 400 points in sixth-straight daily decline, S&P 500 hits new 2022 low
  • More than $200 billion erased from entire crypto market in a day as sell-off intensifies
  • AUD/USD could sink as far as 0.6760 – Westpac
  • EURUSD Short Term: Downside favored

 

 

FOREX

 

 

Weak economic data sends sterling to new lows against dollar 

 

Sterling fell to a fresh two-year low against the U.S. dollar on Thursday after a slew of data pointed to a weakening British economy. 

Britain's economy unexpectedly shrank 0.1% in March after a slump in car sales due to supply-chain problems.

The Bank of England will have to push borrowing costs higher to control fast-rising inflation, but its four interest rate increases since December are having an impact on the economy, Deputy Governor Dave Ramsden told Bloomberg News.

 

 

COMMODITIES

 

 

Gold prices slide more than 1% as dollar rises 

 

Gold and other precious metals dropped on Thursday, with palladium shedding more than 8%, as investors flocked to the dollar driven by bets the U.S. Federal Reserve will stick to aggressive rate hikes. 

Rival safe-haven dollar climbed to fresh 20-year highs – making gold less appealing for other currency holders driven by concerns that tighter monetary policies to tame surging inflation will hurt the global economy.

Declines in gold were, however, capped by a slide in the benchmark 10-year Treasury yield, which hit the lowest level in two weeks.

 

 

ENERGY

 

 

Oil rises as supply concerns outweigh reduced demand, recession risks 

 

Oil prices rose on Thursday, reversing earlier losses, as supply concerns and geopolitical tension in Europe got the upper hand over the economic fears dogging financial markets as inflation soars. 

A pending European Union ban on oil from Russia, a key supplier of crude and fuels to the bloc, is anticipated to further tighten global supplies.

More broadly, oil prices and financial markets have been under pressure this week amid jitters over rising interest rates, the strongest U.S. dollar in two decades, concerns over inflation and possible recession.

 

 

STOCKS

 

 

Dow falls more than 400 points in sixth-straight daily decline, S&P 500 hits new 2022 low 

 

Stocks fell on Thursday as the market sell-off continued following yet another failed attempt to stage a comeback.

The Dow Jones Industrial Average dropped 500 points, or 1.58% and headed for its sixth-straight day of losses after rising more than 80 points. The S&P 500 fell 1.57% and hit a new low for the year and Nasdaq Composite slipped 1.65% as tech-heavy selling persisted.

Thursday’s early market moves showed signs of a rebound and signaled that investor beefed up their appetites for some of the beaten-up names. The Dow rose as much as 80 points at session highs, while the Nasdaq added 1.6%

 

More than $200 billion erased from entire crypto market in a day as sell-off intensifies 

 

Bitcoin fell below $26,000 for the first time in 16 months, amid a broader sell-off in cryptocurrencies that erased more than $200 billion from the entire market in a single day. 

Investors are fleeing from cryptocurrencies at a time when stock markets have plunged from the highs of the coronavirus pandemic on fears over soaring prices and a deteriorating economic outlook. U.S. inflation data out Wednesday showed prices for goods and services jumping 8.3% in April, higher than expected by analysts and close to the highest level in 40 years.

 

 

ANALYSIS

 

 

AUD/USD could sink as far as 0.6760 – Westpac 

 

“Firm USD backed by Fed hawkishness and the not coincidental very sour sentiment in equity markets suggest scope for further AUD decline.”

“Look for a probe of support at 0.6805/33, potentially as far as 0.6760 multi-day/week, a clear buying opportunity.”

“Australia’s commodity price basket should underpin AUD in coming months, back to the mid-0.70s.” 

 

 

CHART

 

 

EURUSD Short Term: Downside favored

Technical View: Short position below 1.0465. Target 1.035. Conversely, break above 1.0465, to open 1.0505.

Comments: The pair breaks below support.

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

 

 

Source: FX Street Economic Calendar


SOURCES:

https://www.reuters.com/markets/currencies/sterling-hits-new-lows-against-dollar-euro-2022-05-12/ 
https://www.cnbc.com/2022/05/12/gold-markets-dollar-treasury-yields-us-inflation-data.html 
https://www.reuters.com/business/energy/oil-eases-after-surging-previous-session-russias-sanctions-2022-05-12/ 
https://www.cnbc.com/2022/05/11/stock-market-futures-open-to-close-news.html 
https://www.cnbc.com/2022/05/12/bitcoin-btc-price-falls-below-27000-as-crypto-sell-off-intensifies.html 
https://www.fxstreet.com/news/aud-usd-could-sink-as-far-as-06760-westpac-202205120832 
 

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