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Gold steadies on weaker dollar, recession risks

 

 

“Life is 10% what happens to us and 90% how we react to it.”– Charles R. Swindoll 

 

 

HEADLINES

  • Dollar stumbles as markets reassess rate bets, eye ECB
  • Gold steadies on weaker dollar, recession risks
  • Oil prices edge higher ahead of G7 talks on new Russian sanctions
  • Wall Street edges lower, weighed by growth stocks
  • Bitcoin miners sell their holdings amid crypto winter's chill
  • EUR/USD to witness additional gains on a break past 1.06 – Scotiabank 
  • AUDUSD Near Term: Downside favored

 

 

Dollar stumbles as markets reassess rate bets, eye ECB

 

The U.S. dollar struggled versus its major rivals on Monday as softening inflation expectations prompted a reassessment of the prospects for aggressive interest rate hikes but volatile markets cushioned a broader decline.

Aggressive rate hike bets have boosted the dollar with an index rising to a near two-decade high of 105.79 earlier this month. But with some high-frequency data indicators showing economic momentum starting to cool and a broader drop in commodity prices, investors are becoming cautious.

Against its rivals, the dollar edged 0.12% lower to 103.89. Earlier this month, it hit 105.79, its highest since late 2002.

 

 

COMMODITIES

Gold steadies on weaker dollar, recession risks

 

Gold prices steadied on Monday, helped by a weaker dollar as recession fears persisted, while investors watched for any cues on policy moves at the European Central Bank’s forum in Portugal.

In the short term, gold’s outlook is mixed as there is “great uncertainty this summer”, with chances of a more aggressive Federal Reserve on one side and recession risks on the other, said Edward Moya, senior analyst with OANDA.

Gold is considered a hedge against inflation spikes and economic risks, but higher interest rates raise the opportunity cost of holding the non-yielding asset.

 

 

ENERGY

Oil prices edge higher ahead of G7 talks on new Russian sanctions

 

Oil prices edged higher on Monday in a volatile session as investors waited for any moves against Russian oil and gas exports that might come out of a meeting of leaders of the Group of Seven (G7) nations in Germany.

Brent crude futures rose $1.12, or 1%, to $114.28 a barrel, while U.S. West Texas Intermediate crude was up $1.33, or 1.3%, at $105.85 a barrel.

Both contracts closed down for the second week in a row on Friday as interest rate hikes in key economies strengthened the dollar and fanned recession fears.

 

STOCKS

Wall Street edges lower, weighed by growth stocks

 

Wall Street lost ground on Monday, with few catalysts to inspire much conviction as investors approach the midway point of a year in which stocks have been battered by heightened inflation worries and tightening Fed policy.

The major U.S. stock indexes were last modestly lower after oscillating through much of the session, with weakness in interest rate sensitive megacaps such as Amazon.com (AMZN.O), Microsoft Corp (MSFT.O) and Alphabet Inc (GOOGL.O) providing the heaviest drag.

The S&P 500 posted one new 52-week high and 29 new lows; the Nasdaq Composite recorded 21 new highs and 71 new lows.

 

Bitcoin miners sell their holdings amid crypto winter's chill

 

Bitcoin miners have been forced to tap into their cryptocurrency stashes as a plunge in prices, rising energy costs and increased competition bite into profitability.

The number of coins miners are sending to crypto exchanges has been steadily climbing since June 7, researchers at MacroHive noted, in a sign that "miners have been increasingly liquidating their coins on exchanges."

Several publicly listed bitcoin miners collectively sold more than 100% of their entire output in May as the value of bitcoin tumbled 45%, an analysis by Arcane Research found.

 

 

ANALYSIS

EUR/USD to witness additional gains on a break past 1.06 – Scotiabank 

 

“The EUR is heading into a test of its 50-day MA at exactly the 1.06 figure, as it holds in a minor upward trend since mid-month.”

“The EUR is now aiming for a test of the big figure that quickly triggered selling pressure earlier this month and is a key zone to beat to preserve the EUR’s ascent.” 

“Beyond the figure, the 1.0640/50 zone is resistance followed by the next big figure.” 

“Support is the daily low of 1.0550 followed by 1.0520 and the 1.05 figure area.”

 

 

CHART

 

AUDUSD Near Term: Downside favored

Technical View: Short position below 0.702. Target 0.686. Conversely, break above 0.702, to open 0.707.

Comments: The pair is expected to resume descend after correction.

 

 

Source: Trading Central 




 

 

CALENDAR

*Times in GMT

 

 

Source: FX Street Economic Calendar

 

 

SOURCES

 

https://www.reuters.com/markets/europe/dollar-shelters-under-recession-clouds-investors-put-safety-first-2022-06-27/
https://www.reuters.com/article/global-precious/precious-gold-steadies-on-weaker-dollar-recession-risks-idUSL4N2YE2EG
https://www.cnbc.com/2022/06/27/oil-slides-more-than-1-as-g-7-debate-iran-nuclear-deal-russia.html
https://www.reuters.com/markets/europe/wall-st-set-extend-bounce-inflation-fears-ease-2022-06-27/
https://www.reuters.com/technology/bitcoin-miners-sell-their-holdings-amid-crypto-winters-chill-2022-06-27/
https://www.fxstreet.com/news/eur-usd-to-witness-additional-gains-on-a-break-past-106-scotiabank-202206271323