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12/05/2023 - 08:10 UTCThe dollar is still seen moving slightly higher against most major currencies on Thursday, with the USDX ending the day 0.66% higher, approaching the 102.0 mark. The dollar surged once again against the South African rand, with the USD/ZAR pair gaining by another 1.74% and moving higher into positive territory for a third consecutive session. The USD/CNH, the USD/MXN and the USD/INR also gained by 0.36%, 0.22% and 0.08% respectively. The USD/TRY marked a new all-time high on Thursday, hitting 19.69 as the country is looking at an inflation rate of close to 50% and ahead of the elections.
The main stock market indices in the U.S. showed mixed results with the US 500 and the US 30 posting minor losses of 0.27% and 0.71% respectively while the US tech 100 gained by 0.24% in a subdued trading session. In Asia, concerns about the health of the Chinese economy remain a major drag on prices with some of the main stock indices moving lower on Thursday and continuing with a sharper decline early on Friday. The China A50 fell by 0.11% yesterday and by another 1.46% on Friday 07:12 AM GMT.
Negative sentiment is seen in the cryptos front, with the main cryptocurrencies weakening to levels last seen in March. Bitcoin is trading more than 8% lower since the beginning of the week as at 07:18 AM GMT on Friday whereas Ethereum is trading close to $1730 and more than 7% lower for this week. The estimated crypto market capitalization fell from levels close to $1.180 trillion seen earlier this week to $1,140 trillion early on Friday.
In the spotlight for Friday is the monthly U.K. GDP report that will be released along with manufacturing and industrial production figures. Later in the day, the U.S. will publish monthly import prices and the UoM Consumer Sentiment index.
The euro ended 0.64% lower against the dollar on Thursday with investors choosing safety after several economic reports that raise uncertainty in the market and create doubts as to the outlook of the Fed’s monetary policy plans.
The number of Americans making new claims for unemployment benefits jumped to a 1.5 year highs last week, pointing to weakness in the labor market.
U.S. producer prices, on the other hand, showed a moderate rise last month, posting the smallest annual increase in producer inflation in more than two years, further evidence that inflation pressures were easing.
Gold prices fell for yet another session on Thursday, posting a 0.74% decline, giving back all the gains from this week as U.S. inflation and employment data raise uncertainty in the markets as to whether the Federal Reserve will ease its monetary policy in upcoming meetings.
Easing inflationary pressure seen in the PPI data was followed by weak employment data as unemployment claims jumped to 1.5-year highs.
The general market consensus is that the possibility of an economic slowdown in the country seems to be keeping the yellow metal supported above $2,000, amid steady safe-haven demand.
WTI oil fell by more than 2% on Thursday, reversing all the gains seen earlier this week on intensifying concerns about the health of the U.S. economy and the intensifying possibility of a banking crisis.
According to analyst reports, due to talks over the U.S. government's debt ceiling stalled and renewed fears that another regional bank is in crisis, there is rising concern that the U.S. will enter a recession. Shares of U.S. regional bank PacWest Bancorp plunged more than 20% on Thursday after it said its deposits declined and it had posted more collateral to the U.S. Federal Reserve to boost its liquidity.
Little impact was seen in prices after the Organization of the Petroleum Exporting Countries (OPEC) said on Thursday that demand in China, the world's biggest oil importer, would increase.
The main stock market indices in the U.S. showed mixed to negative results on Thursday, in a rather subdued trading session, even though worries regarding regional banks remain and Disney's stock price posted a sharp decline. Walt Disney was the top headline in the earnings front, down by more than 8%, after reporting an unexpected decline in Disney+ subscribers.
Regional banks were also in the spotlight as PacWest Bancorp fell by more than 20% on Thursday after reporting that deposits fell 9.5% for the week ended May 5, keeping fears that a deeper bank run is imminent.
In addition, Alphabet saw some solid gains of more than 4% after the announcement that it would incorporate generative artificial intelligence into products including search drew positive remarks from Wall Street.
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