Stocks remain on the back foot

Chris Beauchamp IG

Rising oil prices and yields exert downward pressure on stocks ahead of FOMC, says Axel Rudolph, Senior Market Analyst at online trading platform IG.

Stocks slip for a second straight day

“The rising oil price, which has so far risen by more than 16% in less than a month, creates concerns that rates might have to remain higher for longer. US bond yields have shot up to levels last seen in September 2007 while the US dollar slips for a fourth straight session and stocks for a second day."

FOMC to hold rates steady but outlook is key

“All eyes are on Wednesday's Fed rate decision with the central bank expected to keep rates steady. Comments regarding its future policy path will be closely monitored, though. Another rate hike later this year isn't off the table given the higher oil price is likely to increase inflationary pressures."

Author

Chris Beauchamp

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.