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Fundamental Analysis

The dollar reached its lowest level in two weeks today, Wednesday, as demand for safe assets receded, while investors were looking forward to an expected recovery from the Covid-19 pandemic this year, driven by a major financial and monetary stimulus.
Bitcoin settled at about $ 46,500 after hitting a new high of $ 48,216 overnight after Tesla revealed an investment of $ 1.5 billion in the leading cryptocurrency.
The rival virtual currency, Ethereum, which usually moves in conjunction with Bitcoin, hit a record high of $ 1,826 today before trading up 1.1 percent to $ 1,791.
The dollar, which is usually seen as a safe haven, fell against the main counterpart currencies, as risk appetite was supported by optimism about financial and monetary support and strong profits for companies and vaccines against the Coronavirus.
The dollar index fell to a low of 90.378 today for the first time this month, reaching 90.398 in its latest trading, and is about to suffer losses for the third session.
The dollar nearly settled at 104.58 yen, after falling to a low of 104.5 for the first time this month in the previous session.
The euro rose to $ 1.2126, consolidating its gains for a third day. The pound resumed its highest level in three years at $ 1.3827 before trading up 0.1 percent at $ 1.3818.

...Read More... 2021-02-11 19:15:43

Gold was down on Thursday morning in Asia, inching lower over weak U.S. inflation data and a strengthening dollar. Gold futures were down 0.29% at $1837.40 by 11:15 PM ET (4:15 AM GMT), after reaching their highest point in a week overnight. Data released on Wednesday showed a modest rise in January's U.S. consumer prices. Higher gasoline prices were dented by lower airline fares as COVID-19 continues to impact the airline industry, in turn lowering expectations of a sustained acceleration in inflation in 2021. The core Consumer Price Index (CPI) grew 1.4% year-on-year, below the 1.5% growth in forecasts prepared by and December’s 1.6% growth. The core CPI was flat month-onmonth, against the predicted 0.2% growth and the 0.1% growth recorded in December. The CPI grew 0.3% month-on-month in January, against December’s 0.2% growth, and grew 1.4% year-on-year, below the forecast 1.5% growth but above December’s 1.3% growth. The dollar, which usually moves inversely to gold, slowly inched up on Thursday from two-week lows after the data release. Benchmark U.S. Treasury yields also dropped to a one-week low. Federal Reserve Chairman Jerome Powell also warned that the U.S. job market remains “a long way from a full recovery” and called for a broad national effort to get Americans back to work post-COVID-19, during a speech on Wednesday. Meanwhile, a government source on Wednesday said that Indian gold imports in January rose 72% from 2020. A correction in prices from record highs drew in retail buyers and jewelers, continuing to the growth.

...Read More... 2021-02-11 19:09:24

Oil drops after strong rally, demand hopes limit losses Oil prices fell on Thursday, giving up some of the recent strong gains on profit-taking and speculation that the market's strength could tempt producers like Saudi Arabia to reduce output by less. Brent crude fell 40 cents, or 0.7%, to $61.07 a barrel, as of 0350 GMT, after touching its highest since January 2020 on Wednesday, after a strong run in recent days driven by the Organisation of Petroleum Exporting Countries and its allies, known as OPEC+, agreed output cuts and vaccine rollouts fired up hopes of a recovery in demand. U.S. crude slid 35 cents, or 0.6%, to $58.33 a barrel. Crude stocks last week fell for a third straight week, dropping 6.6 million barrels to 469 million barrels, their lowest since March, according to the Energy Information Administration. Analysts in a Reuters poll had forecast a 985,000-barrel increase. [EIA/S] Brent has risen for the previous nine sessions, its longest sustained period of gains since January 2019. Wednesday had marked the eighth daily rise for U.S. crude. Some analysts say prices have moved too far ahead, and could tempt producers to open their taps a bit more. "Despite finding support for the large draw in the U.S. crude stockpiles... oil prices couldn't hold into its gains possibly on the expectation that Saudi Arabia could roll back their unilateral Feb/Mar production cuts and that OPEC could signal more production coming back online at the March meeting given the sizzling recovery in oil prices," said Stephen Innes, chief global markets strategist at brokerage Axi. Asian shares rested at record highs on Thursday as investors digested recent meaty gains, though the promise of endless free money to sustain buying was reaffirmed by benign U.S. inflation data and a very dovish outlook from the Federal Reserve. [MKTS/GLOB] Crude has jumped since November as governments kicked off vaccination drives for COVID-19 while putting in place large stimulus packages to boost economic activity, and the world's top producers kept a lid on supply. Top exporter Saudi Arabia is unilaterally reducing supply in February and March, supplementing cuts agreed by other members of the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+.

...Read More... 2021-02-11 19:08:41

The dollar was up on Thursday morning in Asia but continued to hover near two-week lows. Weaker-than-expected U.S. inflation and a promise from the Federal Reserve to keep interest rates low continued to raise investor expectations of meagre returns from the U.S. currency. The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.01% to 90.415 by 9:53 AM ET (2:53 AM GMT). The index dropped to a two-week low of 90.249 after the release of the U.S. inflation data. The USD/JPY pair inched up 0.03% to 104.60. The AUD/USD pair inched up 0.03% to 0.7723, with the AUD just below the two-week high against the dollar touched during the previous session. The NZD/USD pair inched down 0.06% to 0.7209. The USD/CNY pair was up 0.37% to 6.4582. The GBP/USD pair inched up 0.05% to 1.3834. The pound was also boosted by diminishing expectations for negative interest rates in the U.K. and climbed towards a nearly three-year high. In Asia, moves were slight in Japan and China, with both markets closed for holidays. U.S. inflation data released on Wednesday showed that the core Consumer Price Index (CPI) was flat month-on-month, against the predicted 0.2% growth and the 0.1% growth recorded in December. Fed Chairman Jerome Powell also noted that unemployment was still high, and re-iterated that the central bank’s new policy framework could accommodate annual inflation above 2% for some time before hiking rates, in his speech on Wednesday. “In other words, easy policy is going to stay there for a long, long time, and that should be negative for the U.S. dollar,” Westpac currency analyst Imre Speizer told Reuters. “I think it’ll be something that sits in the background, as just a reminder that the U.S. dollar can’t go up while it’s got that easy policy relative to everybody else,” Speizer added. Inflation remains a concern, with predictions that pent-up demand and a low-base effect from 2020’s shocks will drive jumps in headline figures by spring. Such a scenario could test the Fed’s resolve. Investors looked to New Zealand, where COVID-19 is firmly under control, but surging housing prices have pushed inflation above expectations. Investors have pared back further rate cut expectations in response. “The Reserve Bank of New Zealand (RBNZ) arguably face quite a different communication challenge (to the Fed), with the demand pulse in New Zealand in a much better position than anyone dared hope,” ANZ Bank analysts said in a note. “RBNZ will welcome this but continue to highlight the need for cautious patience,” the note added.

...Read More... 2021-02-11 19:03:05

The Euro is trading higher against the U.S. Dollar in a lackluster trade on Thursday. The price action suggests investors are still reacting to Wednesday’s disappointing U.S. consumer inflation report and dovish comments from Fed Chair Jerome Powell.

Adding further to the U.S. Dollar’s weakness is another weaker than expected U.S. weekly initial claims report. However, the Euro’s gains are likely being capped by a report showing Euro Zone growth in 2021 is expected to rebound less than previously expected.

At 15:01 GMT, the EUR/USD is trading 1.2137, up 0.0019 or +0.16%.

On Wednesday, the government reported that U.S. consumer prices rose moderately in January and underlying inflation remained benign as the pandemic continues to be a drag on the labor market and services industry.

The U.S. Dollar is being pressured by lower Treasury yields after Federal Reserve Chairman Jerome Powell struck an overall dovish tone on Wednesday and affirmed that the U.S. central bank will keep interest rates at current levels until the economy has reached maximum employment and inflation stays above 2% for some time.

Finally, the Euro is likely being underpinned today by an earlier report that showed U.S. weekly initial jobless claims pulled back slightly but held at elevated levels last week, and the prior week’s new claims were upwardly revised as the coronavirus pandemic exerted more pressure on the labor market.

...Read More... 2021-02-11 19:10:14