Yellen Left the Door Open to Interest Rate’s

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U.S. dollar index surged on Friday to 95.70, the highest level in two-month after Jannet Yellen left the door open to an interest rate hike in the coming months. “An interest rate rise is probably appropriate in the coming months if economic data improve.” Federal Reserve Chair Janet Yellen said on Friday.

Gold prices collapsed on Friday negatively affected by Yellen’s statements on interest rates and traded below $1,206. From a technical point of view, the yellow metal could re-test the psychological levels of $1,200 but it is unlikely to trade above such level.

EUR declined to $1.1110 the lowest level in two-month, negatively affected by the positive statements of Jannet Yellen. The single currency could find some support from the current levels, while likely to continue to decline further to $1.10 and $1.0960.

USD managed to settle above 110 vs. JPY last week as Japan CPI fell short of the market expectation for the second month in a row. It is likely that the greenback could continue its gains vs. JPY with a very slight decline to 109 levels. 

GBP pared its gains and declined to $1.46, negatively affected by a combination of a weak UK data and a strong USD data. The Cable is awaiting UK's EU referendum next month.

Oil prices fell by 1% on Friday negatively affected by a strong USD on a surge to seven months highs, while traders are concerned about higher production with the market hovering near $50 a barrel. On the other hand, all attention to OPEC meeting next week, which is likely to disappoint investors on a resolution supporting oil prices.

The most important economic events:

  • EUR German Consumer Price Index (YoY) (MAY P): (GMT 14:00) – Important – Forecast (0.1%) – Previous (-0.1%).

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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