News

America’s Roundup: Dollar boosted by safety bid on recession fears, Wall Street ends higher, Oil climbs more than 2% as supply cuts outweigh recession fears-July 2nd,2022

Posted at 02 July 2022 / Categories Market Roundups


Market Roundup

• US Jun Manufacturing PMI  52.7, 52.4 previous

•US May Construction Spending (MoM) -0.1%,  0.4% forecast, 0.2% previous

•US Jun ISM Manufacturing Employment 47.3,  49.6 previous

•US Jun ISM Manufacturing PMI  53.0, 54.9 forecast,56.1 previous

•US Jun ISM Manufacturing Prices  78.5, 81.0 forecast, 82.2 previous

•U.S. Baker Hughes Oil Rig Count 595, 594 previous

•U.S. Baker Hughes Oil Rig Count 750, 753 previous

Looking Ahead Economic Data(GMT)

•No data ahead

Looking Ahead - Economic events and other releases (GMT)

•No events ahead

Currency Summaries

EUR/USD: The euro declined on Friday as stronger dollar and weaker Euro zone manufacturing data weighed on euro. A survey showed that euro-zone manufacturing output fell last month for the first time since the first wave of the coronavirus pandemic two years ago, as higher prices and an increasingly gloomy economic outlook discouraged consumers from making purchases. S&P Global's final manufacturing Purchasing Managers' Index (PMI) fell to 52.1 in June from 54.6 in May, the lowest since August 2020 but just ahead of a provisional reading of 52. The euro hit daily low at $1.0364. It was last down 0.54% at $1.0424. Immediate resistance can be seen at 1.0476(38.2%fib ),an upside break can trigger rise towards 1.0556(50%fib).On the downside, immediate support is seen at 1.0366(23.6%fib), a break below could take the pair towards 1.0305(Lower BB).

GBP/USD: Sterling declined against the dollar on Friday as renewed fears of a global recession coupled with weak UK economic data hit the British currency. Data on Friday showed British manufacturing lost more momentum in June than initially estimated as new orders contracted at the fastest rate in two years. As a result of rising fears that higher cost of borrowing would hurt further the UK economy, traders have scaled back some of their Bank of England rate hike expectations for the year. After its biggest six-month decline since 2008 against the U.S. dollar, risk-sensitive sterling briefly dipped below $1.20 against a strengthening U.S. dollar and was last   lower at $1.2087. Immediate resistance can be seen at 1.2163 (5DMA),an upside break can trigger rise towards 1.2223(38.2%fib).On the downside, immediate support is seen at 1.1982(23.6%fib), a break below could take the pair towards 1.1878(Lower BB).

 USD/CAD: The Canadian dollar initially weakened against its U.S. counterpart on Friday but  recovered most of the lost ground as higher oil prices offset stronger dollar . Oil prices climbed amid supply outages in Libya and expected shutdowns in Norway, which offset worries that an economic slowdown could dent demand. Brent crude futures settled at $111.63 a barrel, rising $2.60, or 2.4%. U.S. crude settled at $108.43 a barrel, gaining $2.67, or 2.5%. The loonie traded in a range of 1.2964 to 1.2879, after touching on Tuesday its strongest intraday level in more than two weeks at 1.2816. Immediate resistance can be seen at 1.2962 (23.6%fib), an upside break can trigger rise towards 1.3000 (Psychological level).On the downside, immediate support is seen at 1.2856 (38.2%fib), a break below could take the pair towards 1.2836 (21 DMA).

USD/JPY: The dollar declined against the Japanese yen on Friday as pessimism about the global economic outlook boosted demand for the   safe haven Japanese yen. Runaway inflation and central banks' rush  to raise interest rates and stem the flow of cheap money have fueled the market sell-off and lifted assets seen as safer bets. The Japanese yen gained as much as 0.75% on the day, pulling away from a mid-week low of 137.00  its weakest in 24 years. It was last up 0.4% at 135.235 yen per dollar.  Strong resistance can be seen at 135.13 (23.6%fib), an upside break can trigger rise towards 137.23(Higher BB).On the downside, immediate support is seen at 134.57(5DMA), a break below could take the pair towards 132.56 (38.2%fib).

Equities Recap                   

European stocks ended flat on Friday, as gains in defensive stocks offset a sell-off in semiconductor and commodity-related stocks as investors braced for the European Central Bank's (ECB) first  rate hike in more than a decade this month.

UK's benchmark FTSE 100 closed down by  0.01 percent, Germany's Dax ended up  by 0.23 percent, France’s CAC finished the day up by 0.14 percent.

Wall Street rallied to a significantly higher close  on Friday as investors headed into the second half of the year ahead of the long holiday weekend.

 Dow Jones closed higher  by 1.05 percent, S&P 500 closed up by 1.06  percent, Nasdaq ended up  by 0.90 % percent.

Treasuries Recap

Treasury yields fell on Friday a as investors priced in the likelihood the Federal Reserve will force inflation down to near its target rate.

he yield on 10-year notes   tumbled 23.3 basis points from the open to the session's lowest point, before paring the decline, to be down 7.4 basis points at 2.900%.

The two-year   yield, which typically moves in step with interest rate expectations, slid 8.4 basis points to 2.843%. Both the two-year and 10-year yields were at roughly four-week lows.

Commodities Recap

Oil prices rose more than 2% on Friday as supply disruptions in Libya and expected shutdowns in Norway outweighed expectations that an economic slowdown could hurt demand.

Brent crude futures settled at $111.63 a barrel, rising $2.60, or 2.4%. West Texas Intermediate crude (WTI) settled at $108.43 a barrel, gaining $2.67, or 2.5%.

Gold fell on Friday on course for a third straight weekly decline as a firm dollar and looming interest rate hikes soured appetite for the non-yielding asset, while India's increase in bullion import tax  also dampened its demand outlook.

Spot gold fell 0.1% to $1,804.81 per ounce by 1:52 p.m. ET (1752 GMT), and declined 1.2% for the week. U.S. gold futures settled down 0.3% to $1,801.5.


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