News

America’s Roundup: Dollar struggles to gain on Fed’s mixed messages, Wall Street ends mixed, Gold rises, Oil prices rise as Saudi supply risks come into focus-September 20th, 2019

Market Roundup

* Oil stocks track recovery in crude prices

* U.S.-China low-level trade talks resume on Thursday

• Dollar slips, gives up overnight gains

• US Continuing Jobless Claims 1,661K, 1,672K forecast, 1,674K previous

• US Initial Jobless Claims 208K, 213K forecast 206K previous        

• US Jobless Claims 4-Week Avg 212.25K, 213.00K previous

• US Sep Philadelphia Fed Manufacturing Index 12.0, 11.0 forecast, 16.8 previous

• US Sep Philly Fed Business Conditions 20.8, 32.6 previous

• US Sep Philly Fed CAPEX Index 25.90, 22.60 previous    

• US Sep   Philly Fed Employment 15.8, 3.6 previous

• US Sep Philly Fed New Orders  24.8, 25.8 previous

• US Sep Philly Fed Prices Paid 33.00, 12.80 previous

• Canada ADP Nonfarm Employment Change 49.3K, -30.6K, 30.2K previous

• Russia Central Bank Reserves (USD) 531.2B, 532.7B previous    

• South Africa Sep Interest Rate Decision 6.50%, 6.50% forecast 6.50% previous   

• South Africa Sep Prime Rate 10.00%, 10.00% previous

• US Aug Existing Home Sales 5.49M, 5.37M forecast, 5.42M previous     

• US Aug Existing Home Sales (MoM) 1.3%,-0.4% forecast, 2.5%  previous

Looking Ahead – Economic Data (GMT)

• 23:30 Japan Aug CPI, N.S.A (MoM)  -0.2% previous       

• 23:30 Japan Aug National Core CPI (YoY)  0.5%,0.6% previous

• 23:30   Japan National CPI (YoY)  0.6%,0.5% previous

• 01:30 China PBoC Interest Rate 4.25%  previous

• 03:00   New  Zealand Credit Card Spending (YoY)  5.0% previous              

Looking Ahead – Events, Other Releases (GMT)

No significant events

Currency Summaries

EUR/USD: The euro gained against the dollar on Thursday after a slew of central bank decisions came in more hawkish than expected. The Federal Reserve on Wednesday cut interest rates by 25 basis points to provide insurance against risks including weak global growth and resurgent trade tensions, while signaling a higher bar to further reductions in borrowing costs.Subsequently, the Swiss National Bank, the Bank of England and the Bank of Japan all kept their policies on hold. Norges Bank increased its key policy rate, moving its rates in the opposite direction of the United States and European Union. The euro was up 0.13 percent at $1.1044. An index that tracks the dollar versus a basket of six major currencies was down 0.21 at 98.35. Immediate resistance can be seen at 1.1109 (Daily high), an upside break can trigger rise towards 1.1127 (50 DMA).On the downside, immediate support is seen at 1.1032 (9 DMA), a break below could take the pair towards 1.0964 (lower BB).

GBP/USD: Sterling strengthened against dollar on Thursday, after the Bank of England kept policy rates unchanged, as widely expected. All nine members of the BoE’s Monetary Policy Committee voted to keep rates on hold at 0.75% and reiterated their warnings that exiting the European Union without a deal risked hitting sterling and damaging growth. The pound was last trading  0.52 % higher at $1.2572 after briefly falling to the day’s lows at $1.2448 following the central bank rate decision. Immediate resistance can be seen at 1.2500 (Higher BB), an upside break can trigger rise towards 1.2516 (100 DMA).On the downside, immediate support is seen at 1.2382 (5 DMA), a break below could take the pair towards 1.2270 (11 DMA).

USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Thursday, recovering from a two-week low the day before, as the greenback broadly declined and investors turned their attention to domestic retail sales data on Friday. The U.S. dollar weakened against a basket of major currencies after a slew of central bank decisions came in more hawkish than expected. Canada’s retail sales report for July is due on Friday, which could help guide expectations for the Bank of Canada's interest rate outlook. The Canadian dollar was trading 0.3% higher at 1.3253 to the greenback. Immediate resistance can be seen at 1.3287 (100 DMA), an upside break can trigger rise towards 1.3307 (200 DMA).On the downside, immediate support is seen at 1.3264 (21 DMA), a break below could take the pair towards 1.3200  (Psychological level).

USD/JPY: The U.S. dollar dipped against the yen on Thursday after the Bank of Japan kept interest rates on hold, while the dollar struggled to move higher despite the Federal Reserve offering mixed signals about the path for further easing. The Bank of Japan kept monetary policy steady as expected  and signaled the chance of expanding stimulus as early as its next policy meeting in October by issuing a stronger warning over the risks threatening the economy. But some in the market had expected the BoJ to signal a stronger chance of more stimulus in the context of central banks easing globally to boost growth.. The Japanese yen gained 0.37% to 108.04 against the greenback, pulling back from 7-week low 108.44 reached on Wednesday.  Strong resistance can be seen at 108.28 (Higher BB), an upside break can trigger rise towards 109.00 (Psychological level).On the downside, immediate support is seen at 107.76 (5 DMA), a break below could take the pair towards 106 .98 (11 DMA).

Equities Recap

European stocks rallied on Thursday as investors snapped up battered shares of eurozone banks after the U.S. Federal Reserve toned down expectations of further interest rate cuts.

The UK's benchmark FTSE 100 closed up by 0.31 percent, Germany's Dax ended up by 0.47 percent, and France’s CAC finished the  day up by 0.22 percent.

Gains in Microsoft shares pushed the benchmark S&P 500 within striking distance of its record high, a day after the Federal Reserve cut interest rates as expected but played down hopes of further monetary easing.

Dow Jones closed up by 0.14 percent, S&P 500 ended down 0.07 percent, Nasdaq finished the day down by 0.22 percent.

Treasuries Recap

U.S. Treasury yields fell on Thursday after the Federal Reserve meeting minutes on Wednesday showed division among policymakers on whether further rate cuts are likely, and as pressures in the short-term funding markets eased.

Benchmark 10-year notes gained 4/32 in price to yield 1.770%, down from 1.784% on Wednesday.

Commodities Recap

Gold rose back above $1,500 a ounce on Thursday as the focus returned to global growth risks and Middle East tensions, helping bullion recover after the U.S. Federal Reserve cut interest rates but gave mixed signals on any future easing.

Spot gold   rose 0.5% to $1,500.55 per ounce at 1:50 p.m. EDT (1750 GMT). U.S. gold futures settled down about $9, or 0.6%, to $1,506.20 an ounce.

Brent crude oil prices rose more than 1% on Thursday on fears of longer-than-expected supply shortfalls following Saturday’s attacks on a key Saudi Arabian oil processing facility and escalating tensions in the Middle East.

Global benchmark Brent  settled 80 cents, or 1.3%, higher at $64.40 a barrel, while U.S. West Texas Intermediate (WTI) crude   pared earlier gains and ended largely steady at $58.13 a barrel, just 2 cents firmer.


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