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Oil falls, pares losses on White House rebuttal of Iran deal report -

“Why do we fall, sir? So that we can learn to pick ourselves up.” —Alfred 

HEADLINES

  • Sterling edges up as markets focus on interest rate hike bets
  • Gold jumps 1% as U.S. dollar, yields dip after jobless claims data
  • Oil falls, pares losses on White House rebuttal of Iran deal report
  • Wall Street ends up amid record low volatility ahead of eventful week
  • Treasury yields dip as investors assess interest rate outlook
  • EUR/USD needs to make progress above resistance at 1.0785 to improve – Scotiabank 
  • GBPUSD Near Term: Upside favored

Sterling edges up as markets focus on interest rate hike bets

Sterling ticked higher on Thursday on expectations for more interest rate hikes by the Bank of England (BoE) after a forecast showed UK inflation is set to remain elevated this year.

Britain will have the highest inflation of any leading economy in 2023 at 6.9%, forecasts from the Organisation for Economic Co-operation and Development (OECD) released on Wednesday showed.

Sterling also got a boost after Canada's central bank surprised markets on Wednesday by hiking its overnight rate to a 22-year high of 4.75%.

COMMODITIES

Gold jumps 1% as U.S. dollar, yields dip after jobless claims data

Gold prices climbed 1% on Thursday after data showed U.S. weekly jobless claims surged last week, cementing expectations that the Federal Reserve will pause its interest rate hiking cycle.

The number of Americans filing new claims for unemployment benefits surged last week, suggesting that the labor market was slowing amid mounting risks of a recession.

Money market participants now see a nearly 74% chance that the U.S. central bank will skip raising interest rates at its policy meeting next week, up from nearly 66% earlier, according to the CME’s Fedwatch tool.

ENERGY

Oil falls, pares losses on White House rebuttal of Iran deal report

Oil prices pared some losses after falling by more than $3 a barrel on Thursday after the White House called a news report that the U.S. and Iran may be approaching a deal on oil exports false.

Oil fell sharply on the report, which cited two unnamed sources as saying that Iran and the U.S. are nearing a temporary deal that would trade some sanctions relief in exchange for reducing Iran's uranium enrichment.

But trade reversed on skepticism that oil sanctions would be lifted quickly and after the White House said the report was false.

STOCKS

Wall Street ends up amid record low volatility ahead of eventful week

U.S. stocks closed higher on Thursday regaining some of their momentum thanks to a rebound by technology stocks, while volatility dropped to record lows ahead of an eventful economic and policy calendar next week.

The CBOE Volatility index (.VIX), also known as Wall Street's fear gauge, dropped to a fresh post-pandemic record low.

Investors were sitting on the sidelines ahead of inflation data and a Federal Reserve policy meeting next week.

Treasury yields dip as investors assess interest rate outlook

U.S. Treasurys declined Thursday as an uptick in weekly jobless claims sent yields lower and raised expectations the Federal Reserve would pause its rate-hiking campaign at its meeting next week.

Investors assessed the outlook for the economy and focused their attention on the upcoming Fed meeting in a week that is light on the economic data front.

First-time filings for unemployment benefits reached 261,000 for the week ended June 3, marking the highest level for weekly claims since Oct. 20, 2021, the Labor Department reported Thursday.

ANALYSIS

EUR/USD needs to make progress above resistance at 1.0785 to improve – Scotiabank 

“The EUR remains well-supported on dips to the upper 1.06s and is developing some positive trend momentum on the 1 and 6-hour oscillators.

Flatter trading since late May does suggest the sustained decline in spot over the past month is stabilizing but the EUR needs to make more obvious progress (above minor resistance at 1.0740 and firmer resistance at 1.0785) to improve. A somewhat higher close on the week would be a plus.”

CHART

GBPUSD Near Term: Upside favored

Technical View: Long position above 1.246. Target 1.2545. Conversely, break below 1.246, to open 1.2425.

Comments: The pair remains supported. Further advance favored.

CALENDAR

*Times in GMT

Source: FX Street Economic Calendar


Footnotes
https://www.reuters.com/markets/currencies/sterling-edges-up-markets-focus-interest-rate-hike-bets-2023-06-08/
https://www.cnbc.com/2023/06/08/gold-climbs-on-softer-dollar-as-traders-weigh-fed-verdict.html
https://www.reuters.com/markets/commodities/oil-steady-investors-weigh-supply-demand-drivers-2023-06-08/
https://www.reuters.com/markets/us/futures-muted-bond-yields-rise-rate-jitters-2023-06-08/
https://www.cnbc.com/2023/06/08/us-treasury-yields-investors-assess-interest-rate-outlook.html
https://www.fxstreet.com/news/eur-usd-needs-to-make-progress-above-resistance-at-10785-to-improve-scotiabank-202306081300
 

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