Dollar near 1-week lows vs. rivals in cautious trade | SapForex24

The dollar was hovering near one-week lows against the other major currencies on Friday, as investors remained cautious following the previous session’s disappointing U.S. data and as markets focused on developments in Europe.

EUR/USD rose 0.13% to 1.1166, the highest since June 19.

Research group Markit earlier reported that its German flash manufacturing purchasing managers’ index slipped to 59.3 in June from 59.5 the previous month, compared to expectations for a decline to 59.0.

The German services PMI fell to 53.7 from 55.4.

Markit also said its French flash manufacturing PMI rose to 55.0 this month from 53.8 in April, beating expectations for a rise to 54.0. The French services PMI slipped to 55.3 from 56.9 however.

         Forex Market Update-SapForex24

For the entire euro zone, the composite PMI, which includes manufacturing and service sector activity, declined to 55.7 in May from 56.8 the previous month, disappointing expectations for a downtick to only 56.2.

Separately, European leaders were gearing up for a second day of talks at a European Council meeting on Friday.

Meanwhile, the dollar remained under pressure following a report on Thursday by the U.S. Department of Labor showing that initial jobless claims in the week ending June 17 increased by 3,000 to 241,000 from the previous week’s total of 238,000.

GBP/USD gained 0.36% to trade at 1.2729 after British Prime Minister Theresa May on Thursday laid out what she called a “fair deal” for EU citizens living in the U.K., saying that she did not want to split up families or for people to have to leave due to Brexit.

Elsewhere, USD/JPY held steady at 111.26, while USD/CHF eased 0.09% to 0.9710.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.48% at 0.7576 and with NZD/USD gaining 0.32% to 0.7287.

Meanwhile, a rebound in oil prices helped the commodity-related Canadian dollar on Friday, as USD/CAD slipped 0.11% at 1.3220.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.15% at 97.11, just off a one-week low of 96.95 hit overnight.

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Crude oil prices recover after sliding to 10-month lows-SapForex24

Oil prices recovered slightly in North American trade on Thursday morning, after falling to their lowest level in around ten months in the prior session amid lingering concerns over strong shale output growth in the U.S.

The U.S. West Texas Intermediate crude August contract was at $42.81 a barrel by 6:40AM ET (1040GMT), up 28 cents, or around 0.7%. The U.S. benchmark fell to its lowest since August 11 at $42.05 a day earlier.

Elsewhere, Brent oil for August delivery on the ICE Futures Exchange in London tacked on 41 cents to $45.23 a barrel, after hitting $44.35 in the prior session, a level not seen since November 14.

Oil prices lost around 2% on Wednesday, plunging deeper into bear market territory, after U.S. government data revealed a rise in domestic crude production, which more than offset a drop in oil and gasoline stockpiles.

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The U.S. Energy Information Administration’s weekly supply report published Wednesday showed that domestic output climbed by 20,000 barrels to 9.35 million barrels a day, almost 8% higher than the same period last year.

The EIA report also showed that domestic crude supplies fell by 2.5 million barrels for the week ended June 16, while gasoline stockpiles declined by 600,000 barrels.

Oil prices have been under pressure in recent weeks as concern over rising U.S. shale output offset production cuts by OPEC and non-OPEC members.

Last month, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.

So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers that are exempt from the deal, such as Libya and Nigeria and a relentless increase in U.S. shale output.

Elsewhere on Nymex, gasoline futures for July gained 1.2 cents, or about 0.9%, to $1.421 a gallon, while July heating oil added 0.7 cents to $1.372 a gallon.

Natural gas futures for July delivery ticked up 2.0 cents to $2.913 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day.

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Gold tick higher but holds near 5-week lows on Fed rate hike views-SAPFOREX24

Gold prices edge higher in European morning trade on Wednesday, but stayed near the lowest level in around five weeks as investors worried about future Federal Reserve rate hikes.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

Comex gold futures were at $1,247.85 a troy ounce by 3:35AM ET (0735GMT), up $4.25, or around 0.3%. Gold prices notched a second-straight decline on Tuesday after falling to its lowest since May 17 at $1,242.40.

Also on the Comex, silver futures were up 2.2 cents, or roughly 0.1%, to $16.43 a troy ounce, after hitting its lowest since May 12 at $16.36 a day earlier.

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Market expectations for another Fed rate hike later this year have improved in wake of hawkish comments made by influential New York Fed Chief William Dudley earlier this week.

Dudley gave an upbeat assessment of the economy on Monday and warned against the central bank taking a pause in the tightening cycle. He added that U.S. inflation is a bit low but should rise alongside wages as the labor market continues to improve, allowing the Fed to continue gradually tightening U.S. monetary policy.

The remarks echoed similar comments made by Fed Chair Janet Yellen in last week’s press conference after the central bank hiked rates for the second time this year and maintained plans to go ahead with another rate hike by year-end.

The Fed also provided greater detail about how it plans to reduce its massive $4.5 trillion balance sheet.

Futures traders are pricing in around a 20% chance of a hike at the Fed’s September meeting, according to Investing.com’s Fed Rate Monitor Tool. Odds of a December increase was seen at about 40%.

Market players will focus on U.S. housing data due later in the global day to gauge if a recent downtick in consumer spending and inflation is translating into lower home prices and slack in sales.

The National Association of Realtors is to release data on existing home sales for May at 10:00AM ET (1400GMT) amid forecasts for a decline of 0.7% to 5.55 million.

Among other precious metals, platinum was down 0.3% at $918.80, while palladium dipped 0.5% to $863.15 an ounce.

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Oil edges up but remains near half-year lows as supply overhang weighs | SapForex24

Oil prices edged up on Friday but remained near six-month lows, held down by an ongoing supply overhang that persists despite an OPEC-led effort to cut production and prop up crude markets.

Brent crude futures were at $47.12 per barrel at 0656 GMT, 20 cents, or 0.4 percent, above their last settlement.

U.S. West Texas Intermediate (WTI) crude futures were at $44.56 per barrel, up 10 cents, or 0.2 percent.

Traders said the slight increases were a result of the threat of a partial export halt in Libya.

However, prices for both benchmarks are still down by around 13 percent since late May, when producers led by the Organization of the Petroleum Exporting Countries (OPEC) extended a pledge to cut production by 1.8 million barrels per day (bpd) by an extra nine months until the end of the first quarter of 2018.

             Comex Market Update-SapForex24

Rising U.S. oil output, particularly from shale drillers, is contributing to the ineffectiveness of the OPEC-led cuts.

“Oil is unlikely to find solace into the weekend either, with tonight’s Baker Hughes Rig Count expected to deliver its now weekly increase of operational rigs,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

U.S. investment bank Jefferies said the low prices were due to “a relentless build in the U.S. rig count, weekly builds in U.S. inventories, rising production in Nigeria and Libya, and weak compliance by key OPEC members Iraq and the UAE.”

High exports and production from Russia is also contributing to the ongoing glut.
Top producer Russia, not an OPEC member but participating in the deal, is expected to export 61.2 million tonnes of oil via pipelines in the third quarter (around 5 million bpd), against 60.5 million tonnes in the second quarter, according to industry sources and Reuters calculations.

Add in Russia’s tanker shipments and its total exports are likely more than 9 million bpd.

In the United States, which is not participating in any deal to hold back production, oil output has risen more than 10 percent over the past year to 9.3 million bpd, and the Energy Information Administration (EIA) expects that figure to rise above 10 million bpd in 2018.

In a sign of the continuing supply overhang, traders are again hiring oil tankers to store unsold crude while they wait for higher prices.

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Forex – Dollar higher on Fed move; U.S. data, BoE decision in focus-SapForex24

The dollar gained some ground against other major currencies on Thursday, after the Federal Reserve raised interest rates by 25 basis points on Wednesday, while markets turned their attention to a slew of U.S. data and the Bank of England’s policy decision due later in the day.

EUR/USD slid 0.33% to 1.1181, off the previous session’s seven-month high of 1.1296.

In a widely expected move, the Federal Reserve raised interest rates from 1.00% to 1.25%, in a widely expected move on Wednesday. However, disappointing U.S. inflation data released the same day raised questions about whether the central bank will be able to hike rates again later this year.

Sentiment on the greenback was also expected to remain vulnerable amid mounting U.S. political concerns after the Washington Post reported on Wednesday that U.S. President Donald Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.

FOREX AND COMEX MARKET NEWS UPDATE-SAPFOREX24

GBP/USD declined 0.33% to 1.2703 after the U.K. Office for National Statistics said retail sales fell 1.2% in May, compared to expectations for a 0.8% fall and after a revised 2.5% increase the previous month.

Year-on-year, retail sales increased by 0.9% last month, compared to forecasts for a 1.7% rise.

Core retail sales, which exclude automobiles and fuel, decreased by 1.6% in May, compared to forecasts for a 0.8% slide.

The pound was also under pressure amid mounting political uncertainty in the U.K. as Prime Minister Theresa May faces calls to soften her stance on Brexit days before negotiations on leaving the EU begin.

Later Thursday, the BoE was expected to leave its monetary policy unchanged but market participants will be looking for potential clues on future policy moves.

USD/JPY added 0.15% to 109.74, while USD/CHF gained 0.25% to 0.9735.
Also Thursday, the Swiss National Bank left interest rates on hold at -0.75%, in line with expectations and said the local currency was still “significantly overvalued.”
The SNB added that it will “remain active in the foreign exchange market, as necessary,” while taking the overall currency situation into consideration.

The Australian dollar was stronger, with AUD/USD up 0.22% at 0.7606, while NZD/USD dropped 0.56% to 0.7230.

The Australian Bureau of Statistics earlier reported that the number of employed people rose by 42,000 in May, beating expectations for a 10,000 gain. The unemployment rate ticked down to 5.% from 5.7%.

Separately, Statistics New Zealand said gross domestic product rose 0.5% in the first quarter, confounding expectations for a 0.7% growth rate. Year-on-year, the New Zealand economy grew 2.5%, disappointing forecasts for a 2.7% growth rate.

Meanwhile, USD/CAD held steady at 1.3251, off the previous session’s more than three-month low of 1.3163.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.27% at 97.17, off Wednesday’s seven-month lows of 96.31.

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Oil prices fall as OPEC output, U.S. crude stockpiles rise-SapForex24

Oil prices fell on Wednesday after industry data showed a build in U.S. crude stocks and OPEC reported a rise in its production despite a pledge to cut output.

Brent crude oil (LCOc1) was down 45 cents a barrel at $48.27 by 0755 GMT. U.S. crude (CLc1) was 50 cents lower at $45.96.

Crude prices have fallen more than 10 percent since late May, pulled down by heavy global oversupply that has persisted despite a move led by the Organization of the Petroleum Exporting Countries to curb production.

OPEC and other exporters such as Russia have agreed to keep production almost 1.8 million barrels per day (bpd) below the levels pumped at the end of last year and not to increase output until the end of the first quarter of 2018.

COMEX AND FOREX MARKET UPDATES-SAPFOREX24

But adherence to the cuts is under scrutiny and the producer group said this week that its output rose by 336,000 bpd in May to 32.14 million bpd.

Oil stocks are near record highs in some parts of the world, and producers that are not part of the OPEC deal are increasing output.

Shale supply has pushed U.S. crude production up by about 10 percent over the last year to 9.3 million bpd – not far below the output of top exporter Saudi Arabia.

“The outlook for oil hinges on the effectiveness of the OPEC cuts relative to the supply increases from U.S. shale,” said William O’Loughlin, analyst at Australia’s Rivkin Securities.

Data from the American Petroleum Institute showed on Tuesday that U.S. crude stocks rose by 2.8 million barrels in the week to June 9 to 511.4 million, compared with expectations for a decrease of 2.7 million barrels. [API/S]

With supplies plentiful, strong demand is needed to support the market, but there are signs of a slowdown.

Global energy demand grew by 1 percent in 2016, a rate similar to the previous two years but well below the 10-year average of 1.8 percent, BP (L:BP) said in its benchmark Statistical Review of World Energy on Tuesday.

Economic expansion in China, a key component of world oil demand growth for many years, is now slowing.

“Chinese demand is slow … so we have a build-up of crude in Asia where demand seems to have slowed for now,” said Oystein Berentsen, managing director of oil trading company Strong Petroleum.

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Forex – Sterling selloff pauses, dollar dips as Fed meeting eyed | SapForex24

The selloff in the pound paused on Monday as British Prime Minister Theresa May’s grip on power looked precarious after her party unexpectedly lost its parliamentary majority in an election that could disrupt Brexit negotiations.

GBP/USD was at 1.2742 by 07.47 AM GMT after ending Friday’s session down 1.7%, its largest one-day percentage decline in around eight months.

May is seeking a deal to form a government with support from Northern Ireland’s Democratic Unionist Party, known as the DUP, in order to stay in power after no single party won a clear majority in the UK election on Thursday.

The political impasse sparked uncertainty over how the government’s position on Brexit talks may change with only a week to go before the talks are due to begin.

  FOREX AND COMEX MARKET UPDATE-SAPFOREX24

The euro pushed higher against the dollar and sterling, with EUR/USD rising 0.19% to 1.1217. EUR/GBP added 0.36% to trade at 0.8810.

The euro showed little reaction after polls on Sunday showed that French President Emmanuel Macron’s party is set for a giant majority in parliament after a first round of voting, in line with forecasts.

The dollar was a touch lower against the yen, with USD/JPY dipping 0.13% to 110.20, off Friday’s one-week high of 110.81.

In Japan, data on Monday showed that core machinery orders fell more than expected in April, underlining concerns over the country’s fragile economic recovery.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.14% to 97.10, having retreated from Friday’s two-week highs of 97.47.

Investors were turning their attention to Wednesday’s Federal Reserve policy meeting, where the central bank is widely expected to deliver its second rate hike so far this year.

With a rate hike largely priced in investors will be watching for indications on the pace of further tightening in the second half of the year and further details on the Fed’s plans for reducing its balance sheet.

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