HomeContributorsFundamental AnalysisEuropean Open Briefing: The US Dollar Came Under Pressure

European Open Briefing: The US Dollar Came Under Pressure

Global Markets:

  • Asian stock markets: Nikkei up 0.35 %, Shanghai Composite rose 0.40 %, Hang Seng rallied 0.60 %, ASX 200 gained 0.05 %
  • Commodities: Gold at $1258 (+0.45 %), Silver at $17.20 (+0.50 %), WTI Oil at $51.75 (+0.75 %), Brent Oil at $54.40 (+0.80 %)
  • Rates: US 10-year yield at 2.26, UK 10-year yield at 0.40, German 10-year yield at 0.40

News & Data:

  • Asian shares hit two-year high after Fed signals gradual tightening – RTRS
  • Fed ties rate hike to economic rebound, sees balance sheet cuts in 2017 – RTRS
  • Fed’s Evans sees serious policy miss on U.S. inflation – RTRS
  • Oil prices rise in anticipation of extended OPEC-led production cut – RTRS

Markets Update:

The US Dollar came under pressure after the release of the FOMC meeting minutes. While a June rate hike still seems likely, the central bank was a bit cautious, and the outlook beyond is slightly more uncertain.

EUR/USD rose back above 1.12 and reached a high of 1.1245 in Asia. The pair is likely to retest resistance at 1.12700 soon. Stronger selling interest is noted ahead of 1.13.

USD/JPY rose along with equities, but reversed gains post-FOMC. The pair ran into solid demand below 111.50, and overall, the short-term outlook remains positive if the risk-on sentiment persists.

Commodity currencies strengthened in Asia. AUD/USD is back above 0.75, although it ran out of momentum again. Meanwhile, NZD/USD cleared a key resistance level at 0.7040, and USD/CAD fell below 1.34, supported by a rising oil price.

The main event today will be the OPEC meeting. It is expected that the organization will agree to extend their output cut by 9 months. Anything less would be a disappointment for the market and bring Oil prices under pressure.

Upcoming Events:

  • 09:00 BST – RBA Assistant Governor Debelle speaks
  • 09:30 BST – UK GDP
  • 13:30 BST – US Initial Jobless Claims
  • 15:00 BST – FOMC Member Brainard speaks
  • 18:00 BST – ECB Member Constancio speaks
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