Dollar on track for weekly losses as US yields decline
US dollar declined in European trade against major rivals, resuming the losses after a short hiatus yesterday, following Fed Chair Powell's Congressional testimony.
The greenback is heading for the first weekly loss in a month as US yields decline to two-week lows on US recession concerns.
The Index
The dollar index fell 0.25% to 104.12, after closing up 0.2% yesterday, the first loss in the last four days following weak manufacturing and services data in Europe.
Yields
US 10-year treasury yields declined 1.6% today for the third session, almost hitting two-week lows at 3.007%.
Fed Chair Jerome Powell said the Fed is committed to control prices even if that threatened a recession in the country.
Weekly Trading
The index is still down 0.5% throughout the week, on track for the first weekly loss in a month.
A spate of data showed a slowdown in US services and manufacturing sectors, triggering fears of a recession in the US.
Gold holds above week lows as dollar weakens
Gold prices rose in European trade above week lows as the dollar weakens against major rivals, however the metal is still heading for a second weekly loss.
Prices Today
Gold prices rose 0.5% today to $1,831 an ounce, with a session-low at $1,821, after losing 0.9% on Thursday, the fourth loss in five sessions.
The Dollar Index
The dollar index fell 0.2% on Friday against a basket of major rivals.
The losses came as US yields tumble 1.6% today on track to touch a two-week low at 3.007%, undermining the greenback.
Fed Chair Jerome Powell said the Fed is committed to control prices even if that threatened a recession in the country.
Weekly Trading
Gold is down 0.75% so far this week on track for the second weekly loss in a row, as global central banks move to control runaway inflation and hike rates.
Global central banks are still moving to control inflation and prices, with Bank of England hiking rates by 25 basis points to 1.25%, the fifth such increase in a row.
Swiss Central Bank decided to hike rates by 50 basis points at the June 16 meeting to minus 0.25%, the first such increase since 2007, while analysts expected no change at minus 0.75%.
Higher interest rates weaken demand on gold prices as it becomes less attractive as an investment.
The SPDR
Gold holdings at the SPDR Gold Trust fell 8.7 tones yesterday, the third decline in a row to a total of 1,063 tones, the lowest since June 6.
Euro on track for first weekly profit in a month after Lagarde's remarks
Euro climbed in European trade against a basket of major rivals after a hiatus from gains yesterday off two-week highs, with the common currency heading for the first weekly profit in a month.
The dollar was hurt by a drop in US yields amid concerns about recession in the US following bearish remarks by Fed Chair Jerome Powell.
EUR/USD rose 0.3% to 1.0547, after losing 0.4% yesterday, the first loss in four days on profit-taking off two-week highs at 1.0605.
Christine Lagarde
ECB President Lagarde said the the ECB doesn't expect a recession in the euro zone but will take precautions nonetheless.
Lagarde naturally blamed inflation on the Ukrainian crisis and asserting working on controlling prices using available tools.
US rates
Now markets are pricing in a 0.25% rate hike by the ECB in July, and a similar hike in September to control inflation.
The Dollar Index
The dollar index fell 0.2% on Friday against a basket of major rivals.
The losses came as US yields tumble 1.6% today on track to touch a two-week low at 3.007%, undermining the greenback.
Fed Chair Jerome Powell said the Fed is committed to control prices even if that threatened a recession in the country.
Oil prices gain ground as dollar slips
Oil prices rose in Asian trade with US crude off May 11 lows, while Brent climbed from May 19 lows, as the dollar index rebounded from December 2002 lows.
The gains came ahead of a spate of US data, and following Fed Chair Jerome Powell's Congressional testimony.
As of 05:41 GMT, US crude futures due in July rose 0.75% to $104.77 a barrel, while Brent August futures rose 0.49% to $110.35 a barrel, , as the dollar index fell 0.15% to 104.22.
From the US, new home sales are expected down to 590 thousand, compared to an April drop to 591 thousand, while the UoM consumer sentiment survey is expected down to 50.2 from 58.4.
Fed Chair Jerome Powell finished up his Congressional testimony, amid concerns about the US economy falling in deep recession due to the Fed's monetary tightening path.
US President Joe Biden has officially asked Congress to suspend the federal fuel tax valued at 18.4 cents per gallon and asked companies to support consumers and increase refining operations to gasoline.
Otherwise, Chinese President Xi Jinping just agreed on a new healthcare promoting plans, and tech support plans, as the company continues to battle the Covid 19 pandemic.
Otherwise, OPEC General Secretary Muhammed Barkindo asserted the organization is trying to maintain supplies, and opened the door for extending the OPEC + deal with Russia to beyond this year, depending on market conditions.
On the Ukrainian crisis, the Kremlin said the negotiations with Ukraine aren't going very well, especially after aggressive remarks by the Ukrainian government recently on the Crimean Bridge.
Ukrainian government asserted a goal to take back the Crimean Bridge once it acquire weaponry from the US and Europe.
Baker Hughes data showed US oil rigs rose by 4 rigs to 584 rigs last week, the second such increase in a row to March 2020 highs.
Oil rigs rose in May for the 22nd month in row, the longest such streak ever, while US output rose 100 thousand bpd last week to a total of 12 million bpd, the highest since April 2020.