The Greenback recovered yesterday vs. a basket of major peers as the Philadelphia Fed factory activity index showed unexpected strength in May, a sign that the U.S. factory sector could be on solid ground. The Philadelphia index for current manufacturing activity rose to 38.8 in May from 22.0 in April; however, analysts had anticipated the index to fall to 19.5.
Gold pared its gains yesterday on profit taking, giving back some of its gains as risk aversion picked up. In addition, the precious metal was negatively affected by a strong US data as the Philadelphia manufacturing index came in above expectations, and since the U.S. jobless-benefit claims declined last week to a 28-1/2-year low.
The Greenback pared its losses vs. the Japanese Yen and settled at ¥111. Meanwhile, Japan's gross domestic product edged up for the fifth straight winning quarter and the longest expansion in more than a decade. Japan’s economy advanced 0.5% in the first three months of 2017. Technically, USD could trade higher amid lack of economic data.
The Sterling pound failed to settle above $1.30 vs. USD and traded below $1.2950. Technically, Cable could re-test $1.30 during the day.
Oil prices rose slightly yesterday and U.S. crude settled at $49, due to hopes of an OPEC deal extension.
The most important economic events:
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.