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The U.S dollar gained against most major currencies on Thursday, with the USDX ending the session 0.62% higher, and edging further early on Friday to cross the 104.0 mark hitting levels last seen in June. The greenback surged against the south African rand as well, ending the session up by 1.79%. Against other emerging market currencies, the dollar painted a mixed picture, with the USD/INR down by 0.16% the USD/CNH almost unchanged and the USD/MXN posting a small increase of 0.24%.
A mild recovery was observed in energy prices with WTI and Brent gaining 0.38% and 0.17% respectively, however, on a weekly basis they are headed for another weekly fall, as dollar gains strength global demand is weak and concerns over tight supply seem to be easing.
Precious metals prices traded between gains and losses on Thursday, following a sharp recovery the day before, ending the daily session almost unchanged. Some price action could be anticipated upon Jerome Powell’s speech later in the day as a clear direction is yet to be formed. Significant pressure on the yellow metal as well as silver derives recent strength displayed in the dollar, which stands above two-month highs early on Friday.
The main US stock indices fell on Thursday, with the US 500 up by 1.56%, the US 30 rising by 0.49% and the US tech 100 surging 2.48% higher. The impact on risk sentiment from Nvidia’s strong earnings report appears to be fading on Thursday, as investors now turn their attention to the Jackson Hole meeting where the Fed could provide hints on its decision to raise interest rates or to keep them steady after raising them in July. Their next policy meeting is in September.
Some price action could also be seen later today as German IFO business climate data are reported from Germany and revised UoM consumer sentiment and inflation expectations are due from the US. At the Jackson Hole meeting, along with Fed chairman Powell, FOMC member Harker and ECB president Lagarde also speak today.
The EUR/USD pair retreated on Thursday as the dollar gained momentum ahead of Federal Reserve Chair Jerome Powell’s speech at Jackson Hole later today. The pair ended the session 0.61% lower.
The US Dollar strengthened on Thursday despite mixed US data and no clear messages from Fed members. Data from the US showed that Durable Goods Orders tumbled 5.2% in July, against the market consensus of a 4% decline. Initial Jobless Claims declined to 230,000, better than the market estimate of 240,000.
European Central Bank (ECB) Governing Council member Mario Centeno said on Thursday that they should be cautious at the next meeting. Germany will report a new reading of Q2 GDP and the ZEW Survey. In the US, the only top-tier report is the University of Michigan's Consumer Sentiment Survey.
Gold prices were nearly steady on Thursday ending the session with minor losses of 0.10% despite a stronger dollar and an uptick in bond yields as caution sets in ahead of Federal Reserve chair Jerome Powell’s speech at the Jackson Hole symposium.
Data released yesterday showed the number of Americans filing new claims for unemployment benefits fell last week as labour market conditions remained tight despite the Fed’s aggressive rate hike and the strong jobs market might help the Fed to remain higher for longer. Higher U.S. rates raise the opportunity cost of holding gold, which yields no interest.
Oil prices traded on Thursday between gains and losses but ended the session slightly higher with the WTI contract on iForex platform posting gains of 0.38%.
The session started with oil prices falling amid demand worries and a strong dollar but then managed to rebound after a report of sliding gasoil stocks in Europe. Falling refined product stocks in Europe and a drop in the 2-year U.S. treasury yields helped the oil prices. Market participants focus turns to Powell's speech later today in the Jackson Hole symposium.
U.S. stocks were lower after the close on Thursday, as losses in the Technology, Conusmer services and Consumer Goods sectorsors led shares lower. The U.S main indexes sank on Thursday, despite strong earnings from Chip maker Nvidia as investors turned their attention to the Federal Reserve’s annual meetin in Jackson Hole.
The US 500 and US 30 ended the session 1,83% and 1.06% lower respectively, while US Tech 100 posted a sharp decline of 3.14%. The meeting comes as the Fed faces the choice of raising interest rates again or keeping rates steady after raising them in July. Their next policy meeting is in September.
Except of the Fed’s Powell speech today, the University of Michingan’s latest consumer sentiment is due today.
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