News

Greenback Extends Losses on Fed Easing Expectations

USD

The dollar index, which measures the greenback against a basket of major currencies, ended last week below the 200-day exponential moving average for the first time since April 2018 weighed down by the Fed's tone. The moving average and a trend-line combining DXY's lows since April 2018 acted as significant support for the buck during this period. The Federal Reserve opened the door for interest rates in the coming meetings to protect and ensure the current economic expansion. The US 10-year yields hovered near 2.04%, the USDJPY logged the lowest close since April 2018 at 107.31, and the EURUSD rose to a three-month high of $1.1389.

Metals

Precious metals prices were taking advantage of a weaker dollar during the past week. The price of a gold ounce jumped 4.3%, the largest one week gain in more than three years to settle at $1400 as the Fed signaled to ease the monetary policy. The silver ounce hovered around $15.50, and Palladium inched higher to $1515.

Oil

Oil prices are still on the rise supported by the escalating geopolitical tension and growing chances of an extension for OPEC+ supply cut deal. The recent incidents that took place in the Persian Gulf took the US-Iran clash to a different level. The United States will impose additional sanctions on Iran's regime as a punishment for Iran's latest behavior. On the other hand, there are chatters that OPEC+ will agree to extend the supply cut deal reached last December till the end of 2019. The West Texas Intermediate rose to a three-week high of $58.20, and the Brent futures climbed to a high of $65.77.

Major Economic Events

GMT Country Event Expectation Previous

8:00

EU

German Ifo Business Climate Index

97.4

97.9

12:30

US

Chicago Fed National Activity (May)

0.10

-0.45

 
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