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Gold steadies off recent lows on dollar, yields pullback

“Education costs money. But then so does ignorance.” – Sir Claus Moser 

 

 

HEADLINES

 

 

  • Dollar slips as investors tiptoe back into riskier currencies
  • Gold steadies off recent lows on dollar, yields pullback
  • Oil rises 1% as OPEC+ focus on supply cuts outweighs recession concerns
  • Retailer, energy boost helps Wall Street rally
  • Treasury yields slip as investor attention turns to Fed speaker remarks
  • USD/CAD: Losses should extend towards 1.3290 in the short run – Scotiabank
  • EURJPY Near Term: Upside favored

 

 

Dollar slips as investors tiptoe back into riskier currencies

 

 

The dollar retreated across the board on Tuesday, ceding some of the ground gained in the previous session, as investors looked past worries about China's COVID flare-ups, boosting demand for more risky currencies.

Equities, commodities and riskier currencies were largely firmer on Tuesday, a day after fresh COVID-19 curbs in China fuelled worries over the global economic outlook.

The euro rose 0.5% against the dollar to $1.02965, on pace to snap a three-session streak of losses.

The dollar has rallied against every major currency this year, boosted by the Federal Reserve's supersized interest rate hikes as it battles inflation. But recent cooler-than-expected U.S. consumer price data has spurred investors' hopes that the Fed may be in a position to moderate its pace of hikes.

 

 

COMMODITIES

 

 

Gold steadies off recent lows on dollar, yields pullback

 

 

Gold prices on Tuesday steadied above last session’s low as a retreat in the dollar and benchmark U.S. Treasury yields was offset by a rise in equities, while investors awaited cues on the U.S. Federal Reserve’s monetary policy path.

Spot gold was unchanged at $1,737.19 per ounce by 2:04 p.m. ET (1904 GMT), while U.S. gold futures settled broadly unchanged at $1,739.9.

While gold is considered an inflation hedge, high interest rates discourage investing in non-yielding bullion.

 

 

ENERGY

 

 

Oil rises 1% as OPEC+ focus on supply cuts outweighs recession concerns

 

 

Oil prices rose about 1% on Tuesday after top exporter Saudi Arabia said OPEC+ was sticking with output cuts and could take further steps to balance the market.

However, prices pared gains late in the session after Bloomberg reported that the European Union watered down its latest sanctions proposal for a price cap on Russia's oil exports by delaying its full implementation and softening key shipping provisions.

Brent crude rose 91 cents, or 1%, to settle at$88.36. U.S. West Texas Intermediate (WTI) crude was up 91 cents, or 1.1%, at $80.95.

 

 

STOCKS

 

 

Retailer, energy boost helps Wall Street rally

 

 

U.S. stocks rallied on Tuesday in light trading volume as a sales forecast by Best Buy dampened concerns high inflation would lead to a dismal holiday shopping season while a bounce in oil prices helped lift energy shares.

Best Buy Co Inc (BBY.N) shot up as the best performing stock on the S&P 500 (.SPX) index, after the retailer forecast a smaller drop in annual sales than previously announced and expressed confidence a ramp up in deals and discounts will entice more customers.

The gains in Best Buy helped boost the S&P 500 retail (.SPXRT) index.

 

 

Treasury yields slip as investor attention turns to Fed speaker remarks

 

 

U.S. Treasury yields ticked down Tuesday as investors looked to Federal Reserve speaker comments for hints about future interest rate policy and the central bank’s view on the state of the U.S. economy.

At around 1:50 p.m. ET, the yield on the benchmark 10-year Treasury was down by nearly 7 basis points to 3.758%. The 2-year Treasury yield was last at 4.51%, down 1.6 basis points.

Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.

 

 

ANALYSIS

 

 

USD/CAD: Losses should extend towards 1.3290 in the short run – Scotiabank 

 

 

“Short-term price patterns imply a clear reversal from the upper 1.34s, with the USD extending losses under minor support (rising channel on the intraday chart) at 1.3410/15 (now intraday resistance). Losses should extend towards 1.3290/00 in the short run from here.” 

“The overall pattern of trade keeps the USD on track for a retest of the 1.32 area and, eventually, a drop to the measured move target derived from the Head and Shoulders of 1.3025.”

 

 

CHART

 

 

EURJPY Near Term: Upside favored

 

 

Technical View: Long position above 144.7. Target 145.87. Conversely, break below 144.7, to open 144.34.

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-steadies-china-covid-fears-linger-2022-11-22/
https://www.reuters.com/article/global-precious/precious-gold-steadies-off-recent-lows-on-dollar-yields-pullback-idUSL4N32I2WJ
https://www.reuters.com/business/energy/oil-rises-after-saudis-deny-report-opec-supply-increase-2022-11-22/
https://www.reuters.com/markets/us/futures-flat-after-slipping-china-lockdown-worries-2022-11-22/
https://www.cnbc.com/2022/11/22/treasury-yields-as-investor-attention-turns-to-fed-speaker-remarks.html
https://www.fxstreet.com/news/usd-cad-losses-should-extend-towards-13290-in-the-short-run-scotiabank-202211221420

 

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