The U.S. dollar fell slightly yesterday due to increased demand for safe haven assets on political worries over Italy, Greece and Britain. In addition, U.S. bond yields fell amid weak global sentiment as Greece could fail to reach a new debt relief deal with the creditors.
The single currency settled vs. the Greenback; however, worries over Greece’s bailout didn’t fade. Euro settled following disappointing US data releases, which went against expectations. Looking ahead, Euro could come under renewed selling pressure with softer inflation data from Germany and Spain and as EUR traders reacting negatively to ECB President Mario Draghi’s speech. Meanwhile, markets are awaiting the German prelim CPI and German Unemployment Rate.
The Sterling pound failed to manage its gains and settled at $1.28, as opinion polls showed a tightened battle ahead of the UK general elections, which will be held on 8th June.
Gold prices traded sideways and settled at $1,262, despite a soft U.S. data, weak USD and geopolitical events.
Oil prices pared its gains as Libya output could increase global glut and on worries that extended production deal by OPEC and major exporting countries may not be enough to drain a global glut. Meanwhile, U.S. crude (LCOc1) fell as much as 0.9%, at $51.84 a barrel, while U.S. light crude (CLc1) fell 0.3%, to settle at $49.66.
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.