Gold rises 1% on tepid U.S. dollar, safe-haven inflows

“Being Challenged In Life Is Inevitable, Being Defeated Is Optional.” — Roger Crawford 

 

 

HEADLINES

 

 

• U.S. dollar dips vs major peers after mixed data; yen rises
• Gold rises 1% on tepid U.S. dollar, safe-haven inflows
• Oil prices edge up as rising U.S. inventories dampen demand optimism
• Wall St falls as labor market resilience spurs rate hike worries
• Treasury yields rise after unemployment data points to higher Fed rates
• AUD/USD could dip back to 0.67 before edging higher again to 0.71 in H2 2023 – Rabobank
• EURJPY Near Term: Downside favored

 

 

U.S. dollar dips vs major peers after mixed data; yen rises

 

The dollar slid on Thursday against major currencies in choppy trading as a slew of data continued to show that the U.S. economy was slowing down in the wake of multiple hefty rate hikes from the Federal Reserve, with the market anticipating a pause in tightening this year.

The yen, on the other hand, rallied against the dollar as traders continued to bet the Bank of Japan (BOJ) will eventually shift away from ultra-loose monetary policy.

Thursday's data showed that overall U.S. housing starts declined 1.4% to a rate of 1.382 million units last month. Building permits dropped as well, down 1.6% o a rate of 1.330 million units.

 

 

COMMODITIES

 

 

Gold rises 1% on tepid U.S. dollar, safe-haven inflows

 

Gold prices rose nearly 1% on Thursday, supported by a weaker dollar and some safe-haven demand as weak U.S. economic readings and hawkish comments from Federal Reserve officials fuelled recession worries.

Spot gold was up 0.9% to $1,920.70 per ounce at 12:44 p.m. ET (1744 GMT). U.S. gold futures rose 0.8% to $1,922.70.

The dollar was hovering close to an eight-month low after a raft of data showed the U.S. economy was losing momentum, making gold cheaper for holders of foreign currency.

 

 

ENERGY

 

 

Oil prices edge up as rising U.S. inventories dampen demand optimism

 

Oil prices were up marginally in a volatile session on Thursday, after a surprise build in U.S. crude stocks dampened some optimism around rising Chinese demand and lower Russian supplies.

Brent crude futures last rose $1.14, or 1.34%, to $86.12 a barrel U.S. West Texas Intermediate (WTI) crude rose 82 cents, or 1.03%, to $80.30 a barrel.

Prices were down by more than a dollar per barrel earlier in Thursday’s session, continuing to slide from Wednesday as traders booked profits and U.S. data showed the economy losing momentum. Both contracts had hit their highest since Dec. 5 on Tuesday.

 

 

STOCKS

 

 

Wall St falls as labor market resilience spurs rate hike worries

 

U.S. stock indexes fell on Thursday after data pointing to a tight labor market sparked worries that the Federal Reserve will continue with its aggressive rate-hiking cycle that could potentially tip the economy into a recession.

The Labor Department's report showed a surprise fall in U.S. weekly jobless claims, highlighting labor market resilience in a higher interest rate environment.

The report did not change expectations that the Fed will further scale back the size of its interest rate increases next month, hopes of which were sparked by a slump in retail sales in December and a retreat in inflation in the previous session.

 

 

Treasury yields rise after unemployment data points to higher Fed rates

 

Treasury yields rose on Thursday as investors weighed the latestunemployment data and awaited remarks from Federal Reserve speakers.

The yield on the benchmark 10-year Treasury was last higher by 3 basis points and trading at 3.411%. The 2-year Treasury was trading at 4.118% after rising 4 basis points.

Yields and prices move in opposite directions and one basis point is equivalent to 0.01%.

 

 

ANALYSIS

 

 

AUD/USD could dip back to 0.67 before edging higher again to 0.71 in H2 2023 – Rabobank 

 

“We see risks that AUD/USD could dip back to the 0.67 level on a three-month view on a combination of US recession concerns, a still hawkish Fed and expectations that the RBA is close to a peak in policy. However, on the expectation that the Australian economy will avoid recession this year we expect AUD/USD to find support and edge higher again in the second half of the year.”

“We forecast a move to 0.71 in 12 months.”

 

 

CHART

 

 

EURJPY Near Term: Downside favored

 

Technical View: Short position below 139.45. Target 137.65. Conversely, break above 139.45, to open 140.

Comments: The pair is expected to resume descend after correction.

 

 

 

 

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

 

 

 

 

Source: FX Street Economic Calendar

 

Footnotes
https://www.reuters.com/markets/currencies/dollar-rises-safe-haven-bids-yen-regains-footing-2023-01-19/
https://www.reuters.com/markets/commodities/gold-edges-higher-investors-weigh-fed-slowdown-chances-2023-01-19/
https://www.cnbc.com/2023/01/19/oil-down-1percent-on-another-surprise-build-in-us-crude-stocks.html
https://www.reuters.com/markets/us/futures-fall-weak-data-fuel-recession-worries-fed-comments-tap-2023-01-19/
https://www.cnbc.com/2023/01/19/us-treasury-yields-investors-assess-inflation-outlook.html
https://www.fxstreet.com/news/aud-usd-could-dip-back-to-067-before-edging-higher-again-to-071-in-h2-2023-rabobank-202301191532