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Swiss franc jumps on haven flows

“Chase the vision, not the money, the money will end up following you.” — Tony Hsieh 

 

 

HEADLINES

 

  • Dollar retreats as yen, Swiss franc draw safe-haven flows
  • Gold rallies over 1.5% as dollar, yields slide
  • Oil swings wildly, rebounding to gains after steep losses
  • S&P 500, Dow slip as Cisco drags, growth stocks lead Nasdaq rebound
  • AUD/USD with scope for a recovery to the 0.71 area in 6 months – Rabobank
  • EURJPY Near Term: Downside favored

 

 

FOREX

 

Dollar retreats as yen, Swiss franc draw safe-haven flows 

 

The dollar fell across the board on Thursday, dipping to a 2-week low, extending its pullback from a two-decade high, as most major currencies battered by the greenback’s advance this year drew some buyers. 

With volatility on the rise in global financial markets, the dollar logged sharp declines against the Japanese yen and the Swiss franc, which tend to attract investors in times of market stress or risk.

But the dollar also fared poorly against more riskier currencies, including the Australian and the New Zealand dollar.

 

 

COMMODITIES

 

Gold rallies over 1.5% as dollar, yields slide 

 

Gold rose over 1.5% on Thursday as a slide in the dollar and Treasury yields burnished bullion’s safe-haven appeal after weak U.S. jobs numbers compounded economic concerns. Spot gold jumped 1.4% to $1,841.59 per ounce, while U.S. gold futures rose 1.4% to $1,842.10. 

Gold prices dropped to a near four-month low earlier on Monday and are up about 3% since the dollar backtracked from 20-years highs.

 

 

ENERGY

 

Oil swings wildly, rebounding to gains after steep losses 

 

Oil prices rebounded from earlier losses in another volatile session on Thursday as Chinese officials planned to ease restrictions in Shanghai, which could further tighten global energy supply, and as the dollar retreated from recent gains. 

Crude benchmarks continued their spate of wild swings, with both Brent and U.S. crude rising by nearly $5 a barrel in the span of a few hours, recovering from losses earlier in the week.

Oil markets also rebounded as the dollar weakened on Thursday. The broad dollar index was down 1% on the day after recent gains. Oil benchmarks often move inversely with the dollar as most global crude transactions are handled in dollars, so a rising greenback makes crude more expensive for big importers.

 

 

STOCKS

 

S&P 500, Dow slip as Cisco drags, growth stocks lead Nasdaq rebound 

 

The S&P 500 and the Dow fell for the second straight day on Thursday as Cisco Systems slumped following a dismal outlook, while a rebound in megacap growth stocks boosted the battered Nasdaq. 

Shares of the networking gear maker (CSCO.O) slumped 14.4% as it lowered 2022 revenue growth outlook, taking a hit from Russia exit as well as component shortage due to China lockdowns.

The S&P consumer staples index fell 1.7% to hit a more than five-month low and was the biggest decliner among the 11 major sectors as retail firms face the brunt of rising prices hurting the purchasing power of U.S. consumers.

 

 

ANALYSIS

 

AUD/USD with scope for a recovery to the 0.71 area in 6 months – Rabobank 

 

“The AUD is struggling to push back above the 0.70 level against the USD.  The fall in AUD/USD from highs in the 0.76 area at the start of April to a low around 0.6829 earlier this month is suggestive of a sharp fall from grace for the AUD.  While we attribute much of this fall in the value of the Aussie to fears surrounding growth in China, the mightiness of the USD is also a factor.”

“The tightness of the labour market and the assumption that wages will continue to pick up have driven speculation that the RBA could up the pace of interest rate hikes. The minutes of the May RBA meeting highlight that both 15 bp and 40 bp hikes were considered this month.  This raises the possibly that the Bank could opt for a 40 bps move in June.” 

 

 

CHART

 

EURJPY Near Term: Downside favored

Technical View: Short position below 135.4. Target 133.45. Conversely, break above 135.4, to open 136.

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

 

 

 

Source: Trading Central 

 

 

CALENDAR

 

*Times in GMT

 

 

 

Source: FX Street Economic Calendar


 

SOURCES

 

https://www.cnbc.com/2022/05/19/forex-markets-dollar-covid-in-shanghai.html
https://www.cnbc.com/2022/05/19/gold-markets-dollar-us-bond-yields.html
https://www.reuters.com/markets/commodities/oil-prices-recover-early-losses-global-supply-fears-linger-2022-05-19/
https://www.reuters.com/markets/europe/futures-signal-more-selling-wall-street-growth-fears-mount-2022-05-19/
https://www.fxstreet.com/news/aud-usd-with-scope-for-a-recovery-to-the-071-area-in-6-months-rabobank-202205191605

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