What’s up in Market, 21 June
By: Ahura Chalki
Market analyst – IFC Markets
USD before today’s decline, gain over Fed Bullard’s hawkish remarks that the central bank will begin to reduce debt purchases and even raise interest rates on Friday. However, after sharp gains, today started with a decline.
USD Index: On Friday, the U.S. dollar index hit a two-month high and closed at 92.26. As of the close, the index recorded its most significant weekly increase so far this year. On the other hand, the long-end and short-end U.S. Treasury yield trends are divergent. Earlier today, the 30-year bond yield fell under 2.% for the first time since February before rising back to 2.023%. The 10-year bond yield fell 13 essential points to 1.425%. And the 2-year bond yield rose to 0.25%, the highest since April 2020. DXY started losing the ground today and breached under 92.20
Euro: After three days fall and touching the lowest level since April at 18.46 against USD, today’s USD weakness is helping the pairing for some recovery. For the following days of the week, we have to follow the European PMI data carefully.
GBP: Before regaining, it dropped back under 1.3800 amid Brexit concerns, USD strength, and Delta COVID-19 variant spreading. The pound will be traded soft, and the Cable trend will mostly depend on U.S. dollar movements before the BoE meeting on Thursday.
Among other currencies, the dollar is losing ground against the Yen under 110.00. Both Aussie and Kiwi dollars recorded a decline of more than 3% against the U.S. dollar last week and set their lowest levels so far this year, at 0.6922 and 0.7431, respectively. And Canadian dollar trading between the 1.24 level at 1.2480 against USD.
Gold and Silver stoped their current downtrend, at least for now, and bouncing from two-month lows amid falling yields. However, USD will set the direction for now and can limit the rebound.
U.S. crude oil bottomed out and rebounded in the oil market, closing at $70.94 per barrel. Earlier today, in response to the Iranian Election, continued the gain over $72. Currently, Oil trading at $71.80.
Bitcoin remains under pressure in the hands of the sellers. Data say that BTC “hashrate” saw a massive drop in China’s continued BTC mining ban.
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