News

America’s Roundup: Dollar extends decline against euro,Wall Street ends mixed, Gold recovers from 7-month low, Oil extends losses as Texas prepares to ramp up output after freeze-February 20th,2021

Market Roundup

• Canada Dec Core Retail Sales (MoM) -4.1%,-2.0% forecast, 2.1% previous

• Canada Retail Sales (MoM) -3.4%, -2.5%forecast, 1.3% previous

• US Feb Markit Composite PMI 58.8, 58.7 previous

• US Feb Services PMI 58.9, 57.6 forecast, 58.3 previous

• US Jan Existing Home Sales 6.69M, 6.61M forecast, 6.76M previous

• US Jan Existing Home Sales (MoM) 0.6%, -1.5%,0.7% previous

• US Feb Manufacturing PMI 58.5, 58.5 forecast, 59.2 previous

Looking Ahead – Economic Data (GMT)

•No data ahead

Looking Ahead – Economic events and other releases (GMT)

• No significant events

Fx Beat

EUR/USD: The euro rose against dollar on Friday as single currency was driven up by a surge in global bond yields fuelled by expectations of reflation in the United States. The dollar lost ground, ending its first two-day winning streak in two weeks as disappointing labor market data tempered expectations for a speedy economic recovery from the global health crisis. The euro rose 0.4% to $1.2134. The single currency showed little reaction to purchasing manager index data, which showed a slowdown in business activity in February. However, factories had their busiest month in three years, buoying sentiment. Immediate resistance can be seen at 1.2143(50Fib%), an upside break can trigger rise towards 1.2213 (61.8%fib).On the downside, immediate support is seen at 1.2075(38.2%fib), a break below could take the pair towards 1.2026(16th Feb low).

GBP/USD: Sterling hit $1.40 against the dollar for first time in nearly 3 years on Friday, as investors bet Britain’s quick pace of vaccinations will lead to an economic rebound from the country’s worst crash in output in 300 years. The pound is the best performing G10 currency this year, up 2.3% against the dollar as investors bet that Britain’s quicker pace of vaccinations will lead to a recovery from the worst annual fall in economic output in three centuries. Immediate resistance can be seen at 1.4032(April 23rd high 2018), an upside break can trigger rise towards 1.4100(Psychological level).On the downside, immediate support is seen at 1.3911(23.6%fib), a break below could take the pair towards 1.3801 (38.2%fib).

USD/CAD: The Canadian dollar strengthened to a four-week high against its U.S. counterpart on Friday as the greenback broadly declined, with investors shrugging off domestic data showing a bigger-than-expected drop in retail sales. The loonie was trading 0.5% higher at 1.2615 to the greenback . The currency touched its strongest intraday level since Jan. 21 at 1.2605. For the week, it was on track to gain 0.6% Canadian retail sales fell 3.4% in December, the biggest monthly drop since April, as COVID-19 restrictions hit businesses, Statistics Canada said. Analysts had forecast a 2.5% decline. Immediate resistance can be seen at 1.2645(38.2%fib), an upside break can trigger rise towards 1.2720 (38.2%fib).On the downside, immediate support is seen at 1.2584 (Lower BB), a break below could take the pair towards 1.2557 (23.6%fib).

USD/JPY: The dollar declined against the Japanese yen on Friday after disappointing U.S. labour market data bruised optimism for the country’s speedy recovery from the COVID-19 pandemic.The greenback continued to buck its traditional role as a safe-harbour currency, falling in sympathy with U.S. stocks overnight after an unexpected increase in weekly jobless claims soured the economic outlook. The string of soft labour data is weighing on the dollar even as other indicators have shown resilience, and as President Joe Biden’s pandemic relief efforts take shape, including a proposed $1.9 trillion spending package. Strong resistance can be seen at 105.71 (38.2%fib), an upside break can trigger rise towards 106.21(23.6%fib).On the downside, immediate support is seen at 105.28(50%fib), a break below could take the pair towards 104.98 (61.8%fib).

Equities Recap

Euro zone shares rose on Friday, marking a third week of gains, as data showed factory activity in February jumped to a three-year high, while upbeat quarterly earnings boosted confidence in a broader economic recovery.

UK’s benchmark FTSE 100 closed up by 0.10 percent, Germany’s Dax ended up by 0.77 percent, France’s CAC finished the day up by 0.79 percent.

U.S. stocks gained on Friday, helped by a rise in economy-sensitive cyclical sectors, with the S&P 500 and the Nasdaq on track to end the week on a dull note as investors rotated out of technology-related companies.

Dow Jones closed up by 0.00% percent, S&P 500 closed down by 0.19% percent, Nasdaq settled up by 0.07%% percent.

Treasuries’ Recap

U.S. Treasury yields on the longer end of the curve rose to new one-year highs on Friday as Congress was poised to act on a massive fiscal stimulus package, while the yield on 30-year inflation-protected securities (TIPS) turned positive for the first time since June.

The benchmark 10-year yield reached its highest level since Feb. 26, 2020 at 1.363%. It was last up 5.8 basis points at 1.3448%.

Commodities Recap

Gold prices edged higher on Friday, recovering from a more than seven-month low hit earlier as the U.S. dollar eased, but rising Treasury yields kept bullion on course for its biggest weekly drop since early January.

Spot gold was up 0.3% at $1,780.86 per ounce by 02:17 p.m. EST (1917 GMT), after falling to its lowest since July 2 at $1,759.29 earlier.

Oil prices fell for a second day on Friday, retreating further from recent highs, as Texas energy companies began preparations to restart oil and gas fields shuttered by freezing weather and power outages.

Brent crude futures ended the session down $1.02, or 1.6%, at $62.91 a barrel while U.S. West Texas Intermediate (WTI) crude fell $1.28, or 2.1%, to settle at $59.24.


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