Search LOGIN

Gold up 1% after weak ADP

“Ideas are easy. Implementation is hard.” — Guy Kawasaki 

 

 

HEADLINES

 

 

  • Dollar falls as investors reach for riskier currencies 

  • Gold rises over 1% buoyed by dollar slide, weak ADP data
  • Oil rises after U.S. crude drawdowns, supply tightness
  • Wall Street rallies, lifted by Tesla and Nvidia
  • EUR/USD: Hawkish ECB unlikely to help the euro at the meeting – Danske Bank
  • EURJPY Near Term: Upside favored

 

 

FOREX

 

 

CURRENCIES

 

 

Dollar falls as investors reach for riskier currencies 

 

 

The U.S. dollar fell across the board on Thursday, ceding ground gained in recent sessions as firmer risk sentiment prompted investors to reach for higher-yielding currencies. 

The U.S. dollar currency index , which tracks the greenback against six major currencies, was 0.8% lower at 101.78, on pace to snap a two-day streak of gains.

Riskier currencies, including the Australian and the New Zealand dollars , advanced against their U.S. counterpart, rising 1.17% and 1.20%, respectively.

 

 

COMMODITIES

 

 

Gold rises over 1% buoyed by dollar slide, weak ADP data 

Gold prices rose over 1.2% on Thursday supported by a dip in the dollar and data showing U.S. private payrolls rose less than expected last month. 

While bullion is considered a safe haven during times of political and economic uncertainty, higher interest rates increase the opportunity cost of holding gold, which bears no interest.

 

 

ENERGY

Oil rises after U.S. crude drawdowns, supply tightness 

 

 

Oil prices edged higher on Thursday after U.S. crude inventories fell more than expected amid high demand for fuel and OPEC+ agreed to boost crude output to compensate for a drop in Russian production. 

U.S. crude oil stockpiles fell last week by 5.1 million barrels to 414.7 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop.

Oil prices fell earlier on Thursday ahead of the OPEC+ meeting on expectations Saudi Arabia and other OPEC members could boost oil output to offset a drop in Russian production.

 

 

STOCKS

 

 

Wall Street rallies, lifted by Tesla and Nvidia 

 

 

Wall Street rallied on Thursday, led by Tesla, Nvidia and other megacap growth stocks in a choppy session ahead of a key jobs report due on Friday. 

Tesla (TSLA.O), Nvidia (NVDA.O) and Meta Platforms (FB.O) each jumped more than 5%, lifting the S&P 500 and Nasdaq.

U.S. stocks recovered from a drop earlier in the day after Federal Reserve Vice Chair Lael Brainard said she backs at least a couple more half percentage point interest rate hikes, and sees little case for pausing rate hikes in September if price pressures fail to cool.

The U.S. stock market has made a modest recovery in recent weeks, with investors debating whether the worst of a selloff that has dominated Wall Street in 2022 may be over.

 

 

ANALYSIS

 

 

EUR/USD: Hawkish ECB unlikely to help the euro at the meeting – Danske Bank 

 

 

“Next week’s ECB meeting is set to be the formal end of ECB net asset purchases and a clear signal to hike rates in July, although without a specific guidance of the size of the first rate hike. We expect ECB net purchases to end on the 1 July, thereby in line with previous guidance for Q3.”

“Market focus will be on the discussion if a 50bp hike is possible, and if so when, as well as to any hints about tools that ECB may take to address fragmentation. We expect ECB to hike 25bp each meeting until Mar23, but risks are clearly skewed for a 50bp rate hike in H2 this year (July or Sep most likely).”

“The ECB’s stance has been well communicated ahead of the meeting, including the release of Lagarde’s blog post. As such, the market is well ahead of the view that rate hikes are likely at most, if not all, meetings going in to H2 and excess liquidity will fall. At present, we view it hard for ECB to surprise on the hawkish side versus those market expectations. If any, we might see some pushback against recession risks and/or confidence in inflation turning around ‘sooner than later.’ Both may well give a bit of downside to EUR/USD spot at the meeting, maybe in the scope of some 50-100pips given EUR/USD has seen a short-term uptick to 1.07 recently.”

“We continue to forecast EUR/USD towards 1.00 over the coming 12M.” 

 

 

CHART

 

 

EURJPY Near Term: Upside favored

 

 

Technical View: Long position above 138.4. Target 139.9. Conversely, break below 138.4, to open 137.8.

 

 

Comments: The pair breaks above the resistance.

 

 

Source: Trading Central 



 

CALENDAR

 

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

Foodnotes
1.    https://www.reuters.com/markets/us/forex-rising-us-yields-help-dollar-higher-2022-06-02/
2.    https://www.cnbc.com/2022/06/02/gold-markets-us-treasury-yields-dollar.html
3.    https://www.reuters.com/markets/commodities/oil-prices-skid-3-barrel-investors-take-profits-ahead-opec-meeting-2022-06-02/
4.    https://www.reuters.com/markets/europe/futures-climb-lower-oil-prices-private-jobs-report-focus-2022-06-02/
5.    https://www.fxstreet.com/news/eur-usd-hawkish-ecb-unlikely-to-help-the-euro-at-the-meeting-danske-bank-202206021559
 

UNLIMITED ACCESS!

The best way to keep track of your accounts. Get notifications
and access your dashboard any time!

Open a live or demo account, make secure deposits or get latest
market updates for free!