- Oil prices climb on U.S. stock drawdown
- Gold slides amid economic recovery hopes
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Markit Manufacturing PMI(May) PREL
- (0500 ET/0900 GMT) EZ Markit Services PMI(May) PREL
- (0500 ET/0900 GMT) EZ Markit PMI Composite(May) PREL
Key Events Ahead
- No Significant Events Scheduled
DXY: The dollar index nudged up, retreating from a 2-1/2 week low, after the release of the minutes of the U.S. Federal Reserve’s latest policy-setting meeting showed policymakers agreed to use their tools as appropriate to support the economy. The greenback against a basket of currencies traded 0.2 percent up at 99.37, having touched a low of 99.00 on Wednesday, its lowest since May 4.
EUR/USD: The euro declined, halting a 4-day winning streak after data showed Eurozone annual inflation in April was at 0.3 percent, the lowest level in nearly four years. The European currency traded 0.2 percent down at 1.0952, having touched a high of 1.0999 on Wednesday, its highest since May 1. Investors’ attention will remain on a series of data from Eurozone economies, EZ Markit PMI’s, ahead of the U.S. unemployment benefit claims, existing home sales, and Markit PMI’s. Immediate resistance is located at 1.0994, a break above targets 1.1020. On the downside, support is seen at 1.0934, a break below could drag it below 1.0902.
USD/JPY: The dollar surged after the minutes from the Fed’s latest policy meeting showed the U.S. Federal Reserve policymakers acknowledged the possibility of further support measures if the economic downturn persists. The major was trading 0.2 percent up at 107.69, having hit a high of 108.08 on Tuesday, its highest since Apr. 13. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, existing home sales, and Markit PMI’s. Immediate resistance is located at 107.87, a break above targets 108.10. On the downside, support is seen at 107.36 (5-DMA), a break below could take it near at 107.05 (21-DMA).
GBP/USD: Sterling tumbled, extending previous session losses, as UK inflation fell below 1 percent, its lowest in nearly four years, stoking speculation the Bank of England could move to negative interest rates to bolster an economy hammered by the coronavirus pandemic. The major traded 0.4 percent down at 1.2190, having hit a low of 1.2075 on Monday, it’s lowest since Mar. 26. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2282, a break above could take it near 1.2331. On the downside, support is seen at 1.2165, a break below targets 1.2130. Against the euro, the pound was trading 0.3 percent down at 89.88 pence, having hit a low of 89.89 earlier, it’s lowest since March 27.
AUD/USD: The Australian dollar eased after rising for three consecutive sessions after RBA chief Philip Lowe warned that without a Covid-19 vaccine, the economic recovery is expected to be quite slow due to people’s nervous about their health and unwilling to spend. The Aussie trades 0.6 percent down at 0.6557, having hit a high of 0.6616 on Wednesday, it’s lowest since March 9. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6636, a break above could take it near 0.6690. On the downside, support is seen at 0.6525, a break below targets 0.6506 (5-DMA).
Asian shares nudged lower amid resurgent concerns about the long-term impact of the coronavirus outbreak.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.1 percent.
Tokyo’s Nikkei declined 0.2 percent to 20,552.31 points, Australia’s S&P/ASX 200 index fell 0.4 percent to 5,550.40 points. South Korea’s KOSPI surged 0.5 percent to 1,998.31 points.
Shanghai composite index eased 0.5 percent to 2,869.01 points, while CSI 300 index traded 0.6 percent down at 3,913.38 points.
Hong Kong’s Hang Seng traded 0.3 percent lower at 24,314.49 points. Taiwan shares added 0.9 percent to 11,008.31 points.
Crude oil prices advanced as a drawdown of U.S. crude inventories and output cuts by major producers helped ease concerns about a supply glut, although lingering fears over the global economic fallout from the COVID-19 pandemic limited upside. International benchmark Brent crude was trading 1.8 percent higher at $36.39 per barrel by 0540 GMT, having hit a high of $36.65 earlier, its highest since March 11. U.S. West Texas Intermediate was trading 1.7 percent up at $34.05 a barrel, after rising as high as $34.35 earlier, its highest since March 11.
Gold prices declined, weighed down by hopes of a swift recovery from the coronavirus-driven recession although prospects of more stimulus and bleak data limited gains. Spot gold eased 0.4 percent to $1,740.01 per ounce by 0553 GMT, having touched a high of $1,765.25 on Monday, its highest since Oct. 12, 2012. U.S. gold futures slipped 0.6 percent to $1,740.80.
On Wednesday, the benchmark 10-year yield was last down less than a basis point at 0.7094 percent, while the two-year U.S. Treasury yield was last down less than a basis point at 0.1713 percent.