The greenback soared against its major peers ahead of key economic data. The dollar index which measures the strength of the dollar against a basket of six major currencies, traded at a four-day high to break above the 200-hour simple moving average for the first time in a week. The dollar earned support from the historic summit between the United States and North Korea where the dollar traded at a three-week high against the Japanese Yen. However, the main focus now is on the economic reports from the United States. The Consumer Price Index is due today where analysts expect the inflation numbers to tick higher. The Federal Reserve will commence a two-day meeting today, and the majority of analysts expect to conclude this meeting with an interest rate hike.
The Sterling fell for the second consecutive day against the United States dollar after disappointing industrial and manufacturing data. The British factory output experienced its biggest monthly drop since 2012. The Cable suffered an eight percent drop since mid-April due to the soft economic reports that suggested that the economy is losing momentum which will delay any tightening steps in the monetary policy of the Bank of England. Pound traders will be eyeing the United Kingdom jobs report today, especially the Average Earnings Index including bonus.
Gold prices remain in a tight consolidation pattern ahead of FOMC decision tomorrow. The summit between the United States and North Korea helped prices trade in a seven dollars range for the past 24 hours. From a technical analysis perspective, the Average True Range of a fourteen-day period dropped to $9.2, the lowest since January 2018 and close to the lowest levels since September 2007.
Oil prices rose slightly on the positive outlook of the summit between the United States and North Korea. Oil prices were under pressure for the past two weeks due to the rise in oil production from Russia, Saudi Arabia, and the United States. Also, other market participants are looking forward to increasing their output, which could affect prices negatively. The US crude oil stock from the American Petroleum Institute (API) is due today.
Major Economic Events
|8:30||UK||Average Earnings Index +Bonus (Apr)||2.5%||2.6%|
|8:30||UK||Claimant Count Change (May)||11.3||31.2|
|8:30||UK||Unemployment Rate (Apr)||4.2%||4.2%|
|9:00||EU||German ZEW Economic Sentiment (Jun)||-14.6||-8.2|
|9:00||EU||German ZEW Current Conditions (Jun)||85.0||87.4|
|12:30||US||Core CPI (YoY) (May)||2.2%||2.1%|
|12:30||US||Core CPI (MoM) (May)||0.1%||0.1%|
|20:3||US||API Weekly Crude Oil Stock||-2.028|
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.