The US Dollar jumped up again across the board last night with results showing the U.S. economy growing faster in Q2 than economists had expected. The annual rate of GDP Growth is 4% higher than the forecasted 3% and former reading of 3.1%.
The Sterling kept its weakness yesterday and broke the upward trendline that we had previously mentioned. Although the breakout is not confirmed yet, this certainly is a bad sign for traders who are gone long the sterling against Dollar.
It’s no surprise the Fed continued tapering with another 10 billion dollar monthly bond purchasing amount in its July meeting, but the committee has also boosted its growth perspective on the U.S. economy. The minutes caused little impact on the FX market as the Fed’s policy stays unchanged- is in line with the expectation. Only Gold pared as the positive economic outlook decreased the need of safe-haven assets.
The Aussie Dollar too fell to the support level of 0.9320 yesterday and hit a six-week low. Am I looking at head and shoulder pattern? If the exchange level breaks 0.9320, it will be heading to 0.92.
The Asian stocks moved slightly higher with earnings reports improving. The Shanghai Composite lost 0.1% to 2181 whilst the Nikkei Stock Average gained 0.18%. The Australian ASX 200 advanced 0.62% to 5623. In European stock markets, the FTSE closed 0.5% lower, the DAX lost 0.62%, and the French CAC slumped 1.22%. U.S. stocks were in choppy trading on mixed news of geopolitical tensions, GDP and the Fed’s view on the economy. The Dows lost 0.19% to 16880. The S&P 500 closed flat at 1970, while the Nasdaq Composite Index was up 0.45% to 4463.
In other news, Argentina had failed to reach an agreement with its bondholders and faced a selective default. As has been discussed, this may not mean a domestic crisis for Argentines, but the first domino of a bigger storm. Investors will wait for more information to decide the reaction.
On the data front, local traders will watch the Building Approvals at 11:30 AEST. In the European session, Germany will disclose Retail Sales and Unemployment Change. Also, Eurozone CPI Flash Estimate may have significant impact on Euro if the data is other than the expected 0.5%. Later, at 22:30, there will be Canada GDP and U.S. Unemployment Claims.
Recommended Content
Editors’ Picks
EUR/USD holds steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold price defends gains below $2,400 as geopolitical risks linger
Gold price is trading below $2,400 in European trading on Friday, holding its retreat from a fresh five-day high of $2,418. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row, supported by lingering Middle East geopolitical risks.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.