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The U.S. dollar moved moderately higher once again on Thursday, with the USDX posting a 0.33% gain to end the day right above the 104.0 mark. Against the Turkish lira, the greenback reached as high as 20.41 on Thursday, only to retrace back to the 20.0 mark during the late hours of the session following a decision by the central bank of Turkey to keep interest rates unchanged. Focus remains on the upcoming election on Sunday.
Data from the U.K. released Thursday showed that Retail sales volumes dipped in the year to May at the quickest rate since February 2009 according to the latest CBI Distributive Trades Survey. The sterling has posted consecutive small declines for several daily sessions in the past three weeks, accumulating a monthly decline of almost 1.7% so far, as of Friday 07:00 AM GMT.
Precious metals continue to plunge on Thursday, possibly pressured by recent strength in the dollar and renewed expectations that U.S. interest rates could remain higher for longer, as signalled recently by the Federal Reserve. Energy prices also edged lower, as most commodities priced in the dollar, continuing the previous session's decline after Russian officials did not give any signs for additional OPEC+ production cuts at its meeting next month.
With U.S. debt negotiations finally marking some small progress, the main stock market indices in the U.S. painted a mixed picture on Thursday, as the US 500 and the US tech 100 were seen gaining by 0.19% and 0.85% respectively, while the US 30 fell by a mere 0.13% for the day. The two sides appear to be closing in on a deal that would raise the government's $31.4 trillion debt ceiling for two years, Reuters reported late Thursday, with just $70 billion separating the groups on a total figure that would be well over $1 trillion.
A batch of economic data is due form the U.S. on Friday including monthly Core PCE data and durable goods orders as well as the University of Michigan consumer sentiment index, monthly wholesale inventories, personal spending, and personal income reports.
For a third consecutive session the EUR/USD pair posted losses ending the session 0.30% lower. The US dollar maintained its strength yesterday, as U.S. data pointed to strong economy even after an aggressive rate hike cycle by the Federal Reserve. Weekly initial jobless claims rose by 4000, much less than the forecast while data from the last week was revised lower. The First-quarter GDP growth revised up to 1.3% from an initial 1.1%.
On the other hand, the German Economy which is Europe’s largest economy was in recession in the first quarter as GDP fell 0.3% lower.
On Friday, the EU will not publish relevant macroeconomic data, while the US will release some relevant figures, including April Durable Goods Orders and the Personal Consumption Expenditures Price Index for the same month.
Gold prices slid around to its lowest in two months on Thursday, ending the session 0.97% and closing the date just above $1940 per ounce. Focus remained squarely on negotiations among U.S. lawmakers over raising the debt ceiling, although both Democrats and Republican negotiators flagged little progress towards reaching a deal.
Boosted by the upbeat macroeconomic data releases, the benchmark 10-year US Treasury bond yield gained nearly 1% and reached 3.8% for the first time since the second week of March. The combination of rising US Treasury Yields and a stronger US dollar weighed on the precious metal.
After three consecutive sessions posting gains, the price of the WTI Oil contract had a sharp decline in yesterday’s session ending the day 3.20% lower.
Oil markets suffered steep losses on Thursday, and trimmed most of their gains this week after Russian Deputy Prime Minister Alexander Novak said he expects no new steps from the Organization of Petroleum Exporting Countries and allies (OPEC+) during the meeting in 10 days.
The dissonance in signals pulled back oil prices off three-week highs, as concerns over slowing economic growth also came to fore after data signalled a recession in Germany.
The US 500 and US Tech 100 rose on Thursday followed by the quarterly results from Nvidia which surged 25%, taking its market cap to $939.29 billion and within touching distance of $1.000 trillion, after reporting better-than-expected first-quarter results, fuelling a rally in technology stocks.
The US 30 ended the session with minor losses of 0.13%, while US Tech 100 and US 500 ended the session with gains of 0.85% and 0.19% respectively. Sentiment on stocks was boosted by updates from President Joe Biden and Republican Kevin McCarthy that suggest lawmakers are nearing a deal to raise the debt ceiling needed to avoid a U.S. default.
Ahead in Friday's trade, market participants will be monitoring core durable goods orders, PCE price index data, personal income and spending as well as Michigan consumer sentiment and expectations.
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