Gold drops as higher equities, stronger dollar weigh

“Oh yes, the past can hurt. But you can either run from it, or learn from it.” —Rafiki 

HEADLINES

• Dollar rebounds as banking fears fade; yen falls on quarter-end flows
• Gold drops as higher equities, stronger dollar weigh
• Oil dips on profit taking, markets debate supply tightness
• Shares rally as bank support cheers investors
• Treasury yields waver as volatile month for the bond market continues
• USD/CAD: Break below 1.3570 to pave the way for a test of the low 1.35 region – Scotiabank
• EURJPY Near Term: Upside favored

 

Dollar rebounds as banking fears fade; yen falls on quarter-end flows

The dollar rose against most major peers on Wednesday, reversing some of its recent declines, and gained sharply against the yen, which was volatile as the end of the Japanese fiscal year approaches.

The dollar index , which measures the currency against six rivals, was 0.18% higher on the day at 102.67, pulling away from the near seven-week low of 101.91 touched late last week.

Improving risk sentiment and investor hopes that central banks can once again turn their attention toward fighting inflation was helping support the dollar, Given said.

COMMODITIES

Gold drops as higher equities, stronger dollar weigh

Gold prices slipped on Wednesday as upbeat equities and a stronger dollar weighed, but declines in safe-haven bullion have been fairly contained so far, signalling lingering worries about the banking sector.

Spot gold was trading 0.3% lower at $1,967.29 per ounce by 2:11 p.m. EDT (1811 GMT). U.S. gold futures settled 0.3% lower at $1,966.90.

ENERGY

Oil dips on profit taking, markets debate supply tightness

Oil edged lower on Wednesday in choppy trading as investors looked to pocket profits from two straight days of gains, and as markets debated supply tightness.

Brent crude closed 37 cents, or 0.5%, lower at $78.28 a barrel, while West Texas Intermediate crude fell 23 cents, or 0.3%, to $72.97.

On the supply side, worries of tightness after an unexpected draw in U.S. oil stockpiles and a halt to some Iraqi Kurdistan oil exports were partially offset by a smaller-than-expected output cut in Russia.

U.S. crude oil stockpiles fell unexpectedly last week, the Energy Information Administration said, as refineries ramped up operations after maintenance season and U.S. imports fell to a two-year low.

STOCKS

Shares rally as bank support cheers investors

Global shares rose on Wednesday as the equity market took heart from greater stability in the banking sector, but most Treasury yields edged higher as uncertainty lingered and bond investors gauged the impact of rising interest rates on economic growth.

The sale of assets in Silicon Valley Bank (SVB) on Monday, the regional U.S. lender that collapsed on March 10, has propped up risk appetite among stock investors and eased stress across markets, giving cryptocurrencies and commodity prices a boost.

MSCI's all-world country index (.MIWD00000PUS), a gauge of stocks across the globe, gained 1.22% while yields on the two-year Treasury note, which typically move in step with interest rate expectations, rose 2.3 basis points to 4.085%.

Treasury yields waver as volatile month for the bond market continues

U.S. Treasury yields wavered Wednesday as investors remained cautiously optimistic that recent banking turmoil has settled.

The 2-year Treasury yield gained 8 basis points to 4.08%, holding above the 4% line it recovered to on Tuesday. The yield on the 10-year Treasury was trading 6 basis points lower at 3.566%.

This month alone, the 2-year yield has traded in a range of more than 150 basis points. At its March lows, the 2-year rate traded around 3.55%. It also rose as high as 5.08%.

Yields move inversely to prices and one basis point equals 0.01%.

ANALYSIS

USD/CAD: Break below 1.3570 to pave the way for a test of the low 1.35 region – Scotiabank 

“USD/CAD losses through the low/mid 1.36s confer a softer technical tone on the short-term charts but the Loonie has a lot of work to do still to show any real technical strength.” 

“A move under 1.3570 (50% retracement of the Feb/Mar USD rise) would pave the way for a test of the low 1.35 region where the 100-Day Moving Average (which has been a good bellwether for USD/CAD recently) stands at 1.3517.”

“Resistance is 1.3650/60.”

CHART

EURJPY Near Term: Upside favored

Technical View: Long position above 142.95. Target 143.97. Conversely, break below 142.95, to open 142.4.

Comments: The pair remains supported. Further advance favored.

Source: Trading Central 

CALENDAR

*Times in GMT

Source: FX Street Economic Calendar

Footnotes
https://www.reuters.com/markets/currencies/dollar-defensive-banking-fears-ebb-yen-drops-2023-03-29/
https://www.reuters.com/world/india/gold-prices-slip-fading-banking-jitters-dampen-demand-2023-03-29/
https://www.reuters.com/business/energy/oil-gains-3rd-day-kurdish-supply-concerns-easing-banking-fears-2023-03-29/
https://www.reuters.com/markets/global-markets-wrapup-1-2023-03-29/
https://www.cnbc.com/2023/03/29/treasury-yields-nudge-slightly-lower-as-investor-nerves-settle.html
https://www.fxstreet.com/news/usd-cad-break-below-13570-to-pave-the-way-for-a-test-of-the-low-135-region-scotiabank-202303291151