News

US Dollar Rises Along with Treasury Yields, FOMC Minutes Eyed

USD

The dollar index which measures the greenback against a basket of major currencies edged higher supported by rising Treasury yields. DXY extended gains to 98.13, the highest since the 26th of April. The solid US economic data and the growing uncertainties and risks in Europe boosted the flow to dollar safety. The minutes of the last FOMC meeting will be released today. The Federal Reserve Chairman Jerome Powell drove down the chances of an interest rate cut in his presser that followed the meeting citing that risks to the economic outlook dropped. However, the recently renewed trade tensions between the United States and China contradict with past status. The US 10-year yields rose to a high of 2.442%, the USDJPY climbed to 110.67, and the EURUSD faltered at a high of $1.1187 and raced lower to $1.1148.

GBP

The British pound tumbled against rivals ahead of the European trading session weighed down by the latest Brexit developments. The Sterling soared yesterday as Prime Minister Theresa May declared that she would offer the MPs the chance to vote on a second referendum if they approve her Brexit bill. She is planning to offer her renewed deal for voting early June, but the high chances of failure drove the cable lower to a fresh four-month low of $1.2664. The pound will remain vulnerable to Brexit headlines despite the release of several economic data.

Metals

Metals prices drifted lower as the dollar strengthened along with Treasury yields. The price of a gold ounce fell to a twenty-day low of $1270, the silver ounce tumbled to $14.38, and palladium dropped to $1315.

Oil

Oil prices dropped on rising US crude stockpiles. The American Petroleum Institute reported that the weekly crude oil stocks rose by 2.4 million barrels last week. On the other hand, the ongoing trade tension between the United States and China is weighing on oil prices. The West Texas Intermediate crude futures fell to a low of $62.40, and Brent futures declined to $71.58. Market participants await the weekly oil report released by the US Energy Information Administration.

Major Economic Events

GMT Country Event Expectation Previous

8:30

UK

CPI (YoY) (Apr)

2.2%

1.9%

8:30

UK

Core CPI (YoY) (Apr)

1.9%

1.8%

12:30

CA

Core Retail Sales (MoM) (Mar)

0.9%

0.6%

14:30

US

Crude Oil Inventories

-0.599

5.431

18:00

US

FOMC Meeting Minutes 

 

 

 

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