Dollar index highest since 2002

“Always deliver more than expected.” — Larry Page

 

 

HEADLINES

 

 

• Dollar hits 20-yr high as yen tumbles on dovish Bank of Japan
• Gold hovers close to 10-week low on dollar advance
• Oil prices rally on report that Germany drops opposition to Russian oil embargo
• Wall Street surges as Meta Platforms lifts techs, growth stocks
• GBP/USD to fall another two or three cents on a dovish BoE – Scotiabank
• USDJPY Near Term: Upside favored

 

 

FOREX

 

 

Dollar hits 20-yr high as yen tumbles on dovish Bank of Japan

 

The dollar hit a 20-year high against rivals on Thursday as the Bank of Japan doubled-down on its dovish policy, sending the yen to its weakest level since 2002, while the euro hit a five-year low on growth concerns for the region.

There had been some market speculation the BOJ might step back a little given the pressure building across foreign exchange markets. The yen was last at 131.24, the weakest since April 2002, with the greenback up more than 2% against the Japanese currency on the day.

 

 

COMMODITIES

 

 

Gold hovers close to 10-week low on dollar advance

 

Gold prices lingered close to a 10-week trough on Thursday, hurt by a robust dollar and expectations of faster U.S. rate hikes.

Gold has declined about 2.7% this month, which could be its biggest monthly fall since September, on expectations of an aggressive monetary policy tightening by the U.S. Federal Reserve and a stronger dollar.

Rapid rate hikes will increase the opportunity cost of holding non-yielding bullion.

 

Oil prices rally on report that Germany drops opposition to Russian oil embargo

 

Oil prices rallied on Thursday after reports that Germany is no longer opposed to an embargo on Russian oil, which could further tighten supplies in the already stressed global crude market.

German representatives to the European Union are no longer objecting a full Russian oil embargo as long as Berlin is given time to secure alternative supplies, the Wall Street Journal reported on Thursday.

Russian oil production could fall by as much as 17% in 2022, according to an economy ministry document seen by Reuters, as the country contends with Western sanctions.

 

 

STOCKS

 

 

Wall Street surges as Meta Platforms lifts techs, growth stocks

 

Wall Street rallied on Thursday as a strong quarterly report from Meta Platforms lifted beaten down technology and growth stocks and offset worries about the U.S. economy's contraction in the first quarter.

Investors have been dumping high growth stocks for weeks, due to worries about inflation, rising interest rates and a potential economic slowdown. Even with Thursday's gain, the tech-heavy Nasdaq was down 10% in the month of April, on track for its deepest one-month decline since March 2020.

 

 

ANALYSIS

 

 

GBP/USD to fall another two or three cents on a dovish BoE – Scotiabank 

 

“Sterling one-week risk reversals show the largest downside risk for the GBP over the following week since the initial days of the Russian invasion of Ukraine.”

“A BoE rate hold cannot be ruled out – though it is far from being our base case. The BoE will likely signal a much narrower path for hikes than markets are anticipating, which presents the main GBP downside risk.”

“The pound may still hold around 1.25 over the coming days, but a dovish BoE and weak macro figures over the coming weeks could see the GBP fall another two or three cents; with the broad dollar tone an important unknown.”

 

 

CHART

 

 

USDJPY Near Term: Upside favored

Technical View: Long position above 129.85. Target 131.4. Conversely, break below 129.85, to open 128.65.

Comments: The pair remains supported. Further advance favored.

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

SOURCES:

https://www.reuters.com/business/finance/dollar-nears-two-decade-peaks-problems-plague-euro-yen-2022-04-28/
https://www.reuters.com/business/gold-falls-10-week-low-lofty-dollar-imminent-us-rate-hike-2022-04-28/
https://www.cnbc.com/2022/04/28/oil-markets-china-fuel-demand-outlook.html
https://www.reuters.com/business/nasdaq-futures-jump-2-after-meta-earnings-beat-2022-04-28/
https://www.fxstreet.com/news/gbp-usd-to-fall-another-two-or-three-cents-on-a-dovish-boe-scotiabank-202204281326