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Swiss franc soars after shock rate hike

 

“Ideas are commodity. Execution of them is not.” — Michael Dell 

 

HEADLINES

 

 

  • Swiss franc soars after shock rate hike; pound rises 
  • Gold gains in choppy trade as dollar dip counters rate hikes
  • Oil prices fall after U.S. rate hike, but tight supply still in focus
  • Wall Street sinks as recession fears ripple through markets
  • In call with Twitter staff, Elon Musk muses on space aliens, company's future
  • EUR/USD set to break below support at 1.0350/41 for a fall to parity – Credit Suisse
  • GBPJPY Near Term: Upside favored

 

 

Swiss franc soars after shock rate hike; pound rises 

 

The Swiss franc soared against the dollar and the euro on Thursday after the Swiss National Bank delivered a surprise interest rate hike, while the British pound rose after the Bank of England delivered a rate hike of its own. 

The move put the Swiss franc on pace for its largest daily jump against the euro since the SNB ditched its currency peg in 2015, with the common currency hitting 1.01555 francs, a 2-month low. It was last down 1.9% at 1.0179 francs.

The U.S. dollar tumbled 2.7% against the franc, on pace for its largest one-day drop in at least 6½ years.

 

 

COMMODITIES

 

 

Gold gains in choppy trade as dollar dip counters rate hikes 

 

Gold rose on Thursday, as an easing dollar offset pressure from a large interest rate hike from the U.S. Federal Reserve, with other major central banks also taking cues. 

Prices rose as much as 1.9% on Wednesday as the dollar retreated after the Fed approved its largest interest rate increase in more than a quarter of a century but said such steep hikes may not be common.

Concerns about surging inflation also prompted other central banks to tighten monetary policies, with the Swiss National Bank unexpectedly raising its policy rate for the first time in 15 years and the Bank of England also increasing rates.

 

 

ENERGY

 

 

Oil prices fall after U.S. rate hike, but tight supply still in focus 

 

Oil prices erased early gains to fall to two-week lows on Thursday on the back of inflation concerns highlighted by interest rate hikes in the United States, Britain and Switzerland, though tight oil supply limited losses. 

Prices slipped more than 2% overnight after the Federal Reserve raised its key interest rate by 0.75%, the biggest hike since 1994.

 

 

STOCKS

 

 

Wall Street sinks as recession fears ripple through markets 

 

U.S. stock indexes tumbled on Thursday, with high-profile tech shares leading the rout, after the Federal Reserve's largest rate increase since 1994 to combat decades-high inflation fanned worries of a recession. 

The selloff was severe as the Fed's aggressive move raised fears of a spate of monetary tightening from global central banks that could slow growth around the world. Switzerland and Britain lifted rates following the Fed's 75-basis-point hike on Wednesday.

Among the mega-caps, Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and Tesla Inc (TSLA.O) were some of the biggest losers as investors dumped so-called growth stocks that drove much of the stock-market rally in the past two years.

 

 

In call with Twitter staff, Elon Musk muses on space aliens, company's future 

 

Elon Musk addressed Twitter (TWTR.N) employees for the first time on Thursday, expressing his view that Twitter would need to cut its headcount, but offering few other new details about his $44 billion planned takeover of the social media company. 

Musk appeared via video call 10 minutes late to what turned out to be a freewheeling question and answer session moderated by a Twitter executive, in which Musk mused about the existence of aliens and other space civilizations and his view that Twitter should help "civilization and consciousness."

 

 

ANALYSIS

 

 

EUR/USD set to break below support at 1.0350/41 for a fall to parity – Credit Suisse 

 

“Whilst we see scope for further consolidation above the YTD and 2017 lows at 1.0350/41, our core bias stays negative for an eventual clear and sustained break lower. We would expect this to then act as the catalyst for a resumption of the core downtrend with support seen next at 1.0281 then 1.0217/09, which we look to hold at first.”

“Big picture, we maintain our core negative outlook for an eventual sustained break lower for an eventual fall to parity/0.99.” 

“Resistance is seen at 1.0470 initially, with a break above 1.0508 needed to clear the way for a recovery back to the 13-day exponential average at 1.0554, which we look to prove tougher resistance.” 

“A sustained close above the 55-day average at 1.0672 is needed to warn of a potentially more important low.” 

 

 

CHART

 

 

GBPJPY Near Term: Upside favored

 

Technical View: Long position above 160.8. Target 163.25. Conversely, break below 160.8, to open 159.9.

Comments: The pair remains supported. Further advance favored.

 

 

 

 

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

 

 

 

 

Source: FX Street Economic Calendar

 

Footnotes
https://www.cnbc.com/2022/06/16/forex-markets-dollar-us-federal-reserve.html
https://www.cnbc.com/2022/06/16/gold-markets-dollar-us-federal-reserve.html
https://www.cnbc.com/2022/06/16/oil-markets-supply-demand-outlook.html
https://www.reuters.com/markets/europe/futures-slump-recession-fears-loom-2022-06-16/
https://www.reuters.com/technology/elon-musk-tells-twitter-employees-headcount-will-be-rationalized-virtual-staff-2022-06-16/
https://www.fxstreet.com/news/eur-usd-set-to-break-below-support-at-10350-41-for-a-fall-to-parity-credit-suisse-202206161240
 

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