Posted at 18 June 2021 / Categories Market Roundups
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EUR/USD: The euro declined against dollar on Friday and was set for a weekly loss after the U.S. Federal Reserve's hawkish message on monetary policy lifted the dollar higher. The Fed's sudden turn on Wednesday revitalised the dollar, diminishing the attraction of other major currencies. The euro was last trading around $ 1.1862, down 0.36% against the dollar, and was 1.6% on track for its worst week since October. Immediate resistance can be seen at 1.1928(38.2%fib), an upside break can trigger rise towards 1.1956 (50%fib).On the downside, immediate support is seen at 1.1843(23.6%fib), a break below could take the pair towards 1.1800 (Psychological level).
GBP/USD Sterling extended its fall against the U.S. dollar on Friday, dropping below $1.39, hurt by the U.S. Federal Reserve’s hawkish surprise while data also showed an unexpected fall in Britain’s retail sales. The pound fell against a stronger dollar on Thursday after the Fed surprised markets by announcing it would hike rates and end emergency bond purchases earlier than expected. On Friday, it fell further against dollar. At 20:45 GMT it was down 0.92% on the day $1.3795- its weakest since May 4.Immediate resistance can be seen at 1.3834(38.2% fib), an upside break can trigger rise towards 1.3893(50%fib).On the downside, immediate support is seen at 1.3773 (23.6%fib), a break below could take the pair towards 1.3670 (16th April low).
USD/CAD The loonie weakened against the dollar on Friday to its lowest level in nearly eight weeks and saw its largest weekly decline since March last year as the Federal Reserve's more hawkish stance led to short-covering of U.S. dollars . On Wednesday, the US Federal Reserve signaled that rate hikes could begin in 2023, earlier than the previous forecast for 2024. The loonie traded 0.5% lower at 1.2422 a dollar, or 80.50 cents, after hitting its weakest since April 26 at 1.2480. For the week it fell 2% after ending lower for the past three weeks. Immediate resistance can be seen at 1.2482(Daily high), an upside break can trigger rise towards 1.2509(23.6%fib).On the downside, immediate support is seen at 1.2444 (38.2%fib), a break below could take the pair towards 1.2400(50%fib).
USD/JPY: The dollar edged higher against the yen on Friday as greenback took advantage of boost provided by the Federal Reserve hawkish stance earlier this week by signaling that it expected to hike rates and end emergency bond-buying. Investor risk appetite increased again on Friday after St. Louis Federal Reserve Chairman James Bullard said on Friday that the Fed's shift this week to tighten monetary policy more quickly was a "natural" response to economic growth and in particular inflation, which is moving faster than expected as the country is reopening after the coronavirus pandemic. Strong resistance can be seen at 110.40 (38.2%fib), an upside break can trigger rise towards 111.00 (Psychological level).On the downside, immediate support is seen at 109.95(50%fib), a break below could take the pair towards 109.55 (5DMA).
Mining stocks dragged down European stock markets On Friday, after commodity prices fell, as the Fed’s hawkish stance stopped the STOXX 600 index from rising for the fifth consecutive week.
UK's benchmark FTSE 100 closed down by 1.90 percent, Germany's Dax ended down by 1.78 percent, France’s CAC finished the day down by 1.46 percent.
All three major Wall Street indexes fell on Friday as investors were wary that the Fed would take a more aggressive stance.
Dow Jones closed down by 1.58% percent, S&P 500 closed down by 1.31% percent, Nasdaq settled down by 0.92% percent.
US long-term Treasury yields fell on Friday, and the yield curve flattened further, as market participants bet that the Fed would act as soon as possible to curb inflationary pressures if inflationary pressures persist.
Two-year yields jumped to 0.284%, the highest since April 2020. Five-year yields increased to 0.962%, the highest since April 5.The yield curve between two-year and 10-year notes flattened to 122 basis points on Friday, the flattest since February. Benchmark 10-year notes were last at 1.485%.
Gold struggled to gain a foothold in Friday’s volatile trading, thus setting its worst week in more than a year as the U.S. dollar continued to rise with the help of the Fed’s aggressive stance.
Spot gold edged 0.1% lower to $1,770.96 per ounce by 1:51 pm EDT (1751 GMT).U.S. gold futures settled 0.3% down at $1,769 an ounce.
Oil futures rebounded on Friday to making up for the initial loss, after OPEC sources said that despite rising oil prices, the producer group expected limited oil production growth this year.
Brent crude futures rose 43 cents, or 0.6% to settle at $73.51 a barrel. U.S. West Texas Intermediate (WTI) crude rose 60 cents, or 0.8% to $71.64 a barrel.