Will ADP move the Dollar?

Frank Walbaum

Important news this week

Wed, 05th Aug 00:45 CET NZ Unemployment Rate.
Fri, 07th Aug 14:30 CET US NFP Report.
Fri, 07th Aug 14:30 CET CA Unemployment Rate.

Risk-on rally accelerates as Oil drops on Iran deal hopes

Risk appetite has strengthened further after comments from US Treasury Secretary Scott Bessent suggested that a new agreement with Iran could be close. Markets interpret the negotiations as reducing the risk of supply disruptions in the Middle East, pushing oil prices lower and improving overall investor sentiment. The prospect of easing geopolitical tensions has fuelled another wave of buying across global equity markets.
The S&P 500 has surged to a fresh all-time high, comfortably above the 7,600 mark, confirming the strong bullish momentum. Other major equity indices are also benefiting from the improved outlook. Meanwhile, the Japanese Yen remains weak, although USD/JPY is still trading at levels where traders remain alert for possible intervention from Japanese authorities. For traders already holding long positions, a break above yesterday's high could provide an opportunity to trail stop losses higher and lock in profits while allowing the trend to continue.

Market talk

Interestingly, cryptocurrencies are not participating in the broader risk-on rally. Bitcoin and most major altcoins remain under pressure despite record highs in equities, suggesting capital is currently flowing primarily into traditional financial markets. Markets will continue to monitor headlines surrounding the US-Iran negotiations, as confirmation of a deal could keep pressure on oil prices and further support equities. At the same time, any setback in negotiations could quickly reverse sentiment and bring volatility back across commodities and risk assets.

Tendencies in the markets

Equities positive, USD weak, crypto sideways, oil weak, Silver positive, Gold positive.

Author

Frank Walbaum

AUD/USD pulls back from monthly high but holds above 0.7000

AUD/USD retreats from the monthly high set earlier this Thursday, sliding back to 0.7000 during the Asian session as a further escalation of tensions in the Middle East undermines the risk-sensitive Aussie. However, recent hawkish comments from RBA officials could support the Australian Dollar. Furthermore, the prevailing US Dollar selling bias, despite Fed hike bets and geopolitical uncertainties, could limit losses for the pair.

USD/JPY declines to a one-week low; eyes trading range support near 157.50 on weaker USD

USD/JPY drops to a one-week low during Thursday’s Asian session, with bears now awaiting a break below multi-week range support near mid-157.00s before placing fresh bets amid a broadly weaker US Dollar. Despite bets for a December Fed rate hike and Middle East jitters, the recent decline in US bond yields keeps USD depressed near a three-week low. Moreover, hawkish BoJ expectations and intervention risks underpin the Japanese Yen, further weighing on the currency pair.

Gold weakens to near $4,110 amid broader strength in oil prices

Gold is down 1% to near $4,095 in the Asian trading session on Thursday on the back of fears that global inflation expectations could accelerate further due to heightened geopolitical tensions in the Middle East.

XRP and XLM recovery stalls below EMAs

Ripple (XRP) and Stellar (XLM) remain under pressure on Thursday as both struggle to sustain their recent recovery attempts. XRP trades below $1.36, while XLM slips beneath $0.183, as mixed derivatives metrics, weakening momentum indicators and heating market conditions suggest cautious market sentiment. Derivatives data shows weakening conditions for Ripple and Stellar.

The US Oil reserve hit a 44-year low. Now the barrels are coming back

Washington lent out a third of the Strategic Petroleum Reserve this year rather than selling it. The loans come due from now to 2029, and after the midterms, the reserve has nothing left to hold fuel prices down. The US Strategic Petroleum Reserve held 282.7 million barrels in the week to October 16, down another 300K, and lower than at any point since October 1982.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.