US Open Note – Dollar unlocks new yearly high versus yen; oil posts new high



Dollar/yen flies above 111.00; US futures in red

As markets wait for US Markit preliminary readings at 13:45 GMT, the dollar is edging higher. After two red days, the dollar index is practically unchanged below 92.00. The US dollar continues to rise versus the Japanese yen, creating new highs for the year, jumping above 111.00. Following Powell's remarks, stocks rallied; however, US futures are currently trading flat on Wednesday. The single currency is heading above $1.19 but is still stuck below the 200-day simple moving average (SMA), while the pound is developing near $1.40.

In his speech before Congress yesterday, Fed Chair Powell said nothing surprising. He emphasized that the Fed is still a long way from raising rates, even though inflation has been higher than forecasted and may continue to be higher for longer. Fed board members Daly and Mester on the other hand, both suggested that they may wait to decide on tapering. Today's speakers are Bowman, Bostic, and Rosengren.

The main focus will be on Markit's preliminary June PMI data. Manufacturing PMI is projected to be 61.5 in June, down from 62.1 in May, and services PMI is expected to be 70.0, up from 70.4 in May. This would result in a modest decrease in the composite PMI from 68.7 in May.

BoE announces interest rate decision tomorrow

The Bank of England (BoE) will announce its decision on Thursday. As policymakers have sounded optimistic in previous meetings, current events in the UK call for caution and recognition of some potential negative risks. Given that the BoE announced tapering at its most recent meeting on May 5, it seems premature to make any additional modifications this week. The next set of updated macro predictions will be released at the August 5 meeting.

Commodity currencies gain more ground

Aussie/dollar is surpassing the $0.7570 barrier and the 200-day SMA, while kiwi/dollar is creating a strong battle with $0.7050. Dollar/loonie is heading south after the pullback off 1.2485 and the Canadian retail sales declined to -5.7% m/m in April from 3.6% before and on a yearly basis decreased to -7.2% versus 4.3%.

Oil hits record high; gold posts modest gains

On Wednesday, WTI crude futures hit a record high of $73.5/per barrel, the highest since October 2018, due to lower stockpiles. Gold prices are falling back below $1,800/per ounce, trading with weak momentum, while silver has found strong support at the 200-day SMA around $25.73/per ounce.

Latest News

US Open Note – Stock indices to claim monthly gains despite jitters; dollar on the backfoot


Weekly Comment – USD loses altitude; can NFP report rekindle summer rally?



Week Ahead - Nonfarm payrolls highlight a huge week


Daily Market Comment – Stocks falter again, bruised dollar seeks to end losing streak

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.