America’s Roundup: Dollar gains as Fed outcome boosts risk sentiment,Wall Street ends lower, Gold gains,Oil prices post weekly loss on Omicron uncertainty-December 18th,2021

Posted at 18 December 2021 / Categories Market Roundups

Market Roundup

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•Canada Oct Foreign Securities Purchases  23.92B, 20.02B previous

•Canada Oct Budget Balance (YoY)  -72.25B,-68.57B previous

•Canada Oct Budget Balance  -3.68B, -11.41B previous

•U.S. Baker Hughes Oil Rig Count 475,467 previous

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Currency Summaries

EUR/USD: The euro dipped on Friday as traders wrestled with this week's surprisingly hawkish turn from major central banks in the fight against inflation, and as rising Omicron cases spark worries about the hit to the global economy. The hawkish tilt from central banks this week including the Federal Reserve and Bank of England, and to a lesser degree the European Central Bank, was initially greeted by a wave of buying from investors confident policymakers will curb higher inflation. But the mood has since turned gloomier as traders fret markets pumped up on cheap money are vulnerable to even the smallest of pullbacks in stimulus. Immediate resistance can be seen at 1.1268 (38.2% fib), an upside break can trigger rise towards 1.1345 (50%fib).On the downside, immediate support is seen at 1.1205(Lower BB), a break below could take the pair towards 1.1175(23.6%fib).

GBP/USD: The British pound edged lower on Friday but was on track to post its biggest weekly rise since October after the Bank of England this week became the first G7 economy to raise interest rates. The BoE stunned markets on Thursday by raising interest rates by 15 bps to 0.25%, sending gilt yields, bank stocks and the pound shooting higher. Britain became the first G7 economy to hike rates since the onset of the pandemic, and the U.S. Federal Reserve this week also signalled plans to tighten policy in 2022. The European Central Bank only slightly reined in stimulus. Immediate resistance can be seen at 1.3256 (38.2%fib), an upside break can trigger rise towards 1.3294(21DMA).On the downside, immediate support is seen at 1.3216(Daily low), a break below could take the pair towards 1.3167(23.6%fib).

USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Friday as the fast-spreading Omicron coronavirus variant weighed on global equity markets and the greenback broadly climbed. Stocks globally  fell and the price of oil , one of Canada's major exports, settled 2.1% lower at $70.86 a barrel.The loonie was trading 0.8% lower at 1.2875 to the greenback , its biggest decline since Nov. 26. For the week, the Canadian currency was down 1.2%.Immediate resistance can be seen at 1.2910 (23.6%fib), an upside break can trigger rise towards 1.2940 (Daily high).On the downside, immediate support is seen at 1.2845(38.2%fib), a break below could take the pair towards 1.2795(50%fib).

USD/JPY: The dollar rebounded    against the Japanese yen on Friday amid talk of interest rate hikes by central bankers and concerns about the spread of Omicron cases. Traders are comparing changing interest rates across currencies as central banks go at different speeds to adjust monetary policies in the face increasing signs of persistently high inflation and the Omicron threat. The dollar index against major currencies was up nearly 0.6% , recouping all of the value it had lost on Thursday following a series of central bank policy statements. Strong resistance can be seen at 113.76 (23.6%fib), an upside break can trigger rise towards 114.28 (Dec 15th high).On the downside, immediate support is seen at 113.32 (38.2%fib), a break below could take the pair towards 113.13(Daily low).

Equities Recap

Banks and luxury stocks led declines on Friday, pushing European shares into the red for the week that saw hawkish signals from a flurry of major central banks and rising worries about the economic impact of the Omicron coronavirus variant.

UK's benchmark FTSE 100 closed up by 0.13 percent, Germany's Dax ended down by 0.67  percent, France’s CAC finished the day down by 1.12% percent.                              

Wall Street's main indexes fell on Friday, weighed down by cyclical stocks linked closely to the economy, as investors digested the Federal Reserve's decision to end its pandemic-era stimulus faster.

Dow Jones closed down by 1.48 percent, S&P 500 closed down by 1.03  percent, Nasdaq settled down by 0.07 % percent.

Treasuries Recap

U.S. Treasury bond yields were lower on Friday, though off session lows, as traders assessed the recent hawkish Federal Reserve stance as it bank tries to balance rising inflation against the economic toll of the Omicron coronavirus variant.

The spread between yields on the 5- and 30-year Treasury bond , was at 63.6 basis points, flatter on the day but holding on to some of Thursday's sharp steepening move.

Commodities Recap

Oil prices fell on Friday and were also down on the week as surging cases of the Omicron coronavirus variant raised fears that new restrictions may hit fuel demand.

Brent crude futures settled down $1.50, or 2%, at $73.52 a barrel, while U.S. West Texas Intermediate (WTI) crude dropped $1.52, or 2.1%, to settle at $70.86 a barrel. Brent was down 2.6% on the week and WTI fell 1.3%.

Gold rose above the key $1,800 level on Friday and was set for its first weekly gain in five as worries over the Omicron surge and hot inflation drove investors to safe-haven assets.

Spot gold was up 0.2% at $1,802.12 per ounce by 01:56 p.m. ET (1856 GMT), taking its rise so far this week to 1.1%. U.S. gold futures settled up 0.4% at $1,804.90.

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