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Oil falls over 3% on demand concerns, strong dollar

 

“Get five or six of your smartest friends in a room and ask them to rate your idea.” — Mark Pincus

 

 

 HEADLINES

 

 

  • Dollar edges up vs yen; Swiss franc hits highest vs euro since 2015
  • Gold dips to near 2-month low as sharp rate-hike bets bolster dollar
  • Oil falls over 3% on demand concerns, strong dollar
  • Stocks sink as Wall Street’s rebound attempt falters, Nasdaq drops 1%
  • Ether falls after the smart contracts network completes long anticipated ‘merge’
  • EUR/USD is in danger of dipping further towards 0.95 – Rabobank
  • EURJPY Near Term: Upside favored

 

 

Dollar edges up vs yen; Swiss franc hits highest vs euro since 2015

 

 

The dollar was slightly higher against the yen on Thursday following data showing U.S. retail sales unexpectedly rebounded in August, while the Swiss franc hit its strongest against the euro since 2015.

The dollar pared some gains following the data, which showed retail sales increased 0.3% last month, but demand for goods is cooling as the U.S. Federal Reserve raises interest rates. Economists polled by Reuters had forecast sales would be unchanged.

The dollar has been supported by the view that the Fed will keep tightening policy aggressively.

 

 

COMMODITIES

 

 

Gold dips to near 2-month low as sharp rate-hike bets bolster dollar

 

 

Gold prices dropped to a near two-month low on Thursday, trading below the $1,700 mark once again, as increased prospects of more aggressive rate hikes by the Federal Reserve continue to weigh.

Spot gold fell 0.5% to $1,687.74 per ounce, after touching its lowest since July 21. U.S. gold futures slipped 0.7% to $1,697.20.

While the consensus is for a 75-basis-point (bps) hike, some are calling for a 100 bps increase which is partly reflected in the gold market, Menke said, adding that a 75 bps hike could thus come as a positive surprise for the gold market.

 

 

ENERGY

 

 

Oil falls over 3% on demand concerns, strong dollar

 

 

Oil fell more than 2% on Thursday as expectations of weaker demand and a strong U.S. dollar ahead of a potentially large interest rate increase outweighed supply concerns.

The International Energy Agency said this week oil demand growth would grind to a halt in the fourth quarter. The dollar held near recent peaks, supported by expectations the U.S. Federal Reserve will continue to tighten policy.

Brent crude was down 3.7% at $90.60 per barrel. U.S. West Texas Intermediate crude declined 3.9% to $85.03.

 

STOCKS

 

 

Stocks sink as Wall Street’s rebound attempt falters, Nasdaq drops 1%

 

 

U.S. stocks fell in choppy trading on Thursday as investors mulled over several economic reports that showed a muddy picture of the U.S. economy.

The Nasdaq Composite shed 1.4%, while the S&P 500 fell 1%. The Dow Jones Industrial Average lost 158 points, or 0.5%.

Shares of Adobe fell 13% after the company announced a $20 billion deal to buy Figma, weighing on the Nasdaq. Oil giant Chevron dropped 2%, hurting the Dow.

Financial stocks outperformed, with Goldman Sachs rising 1.3% and JPMorgan climbing 1%.

 

 

Ether falls after the smart contracts network completes long anticipated ‘merge’

 

 

The price of ether fell Thursday after the Ethereum network completed its migration to the proof-of-stake consensus mechanism, also known as the “merge.”

Ether lost about 6% to trade at $1,495.78, according to Coin Metrics. Traders had expected to see a decline in the price following the transition late Wednesday night.

Investors have been cheering Ethereum’s planned tech upgrade for months for its ability to turn ether into a yield-generating asset and to improve the security of the network in an energy efficient way. Many have called it one of the most important moments in crypto’s short history.

 

 

ANALYSIS

 

 

EUR/USD is in danger of dipping further towards 0.95 – Rabobank 

 

 

“The precariously position of growth in the region (Eurozone) in the coming months may mean that higher short-term rates do not translate into a significantly stronger EUR.  In our view, the market has not yet fully priced in the risks to the growth in the region in the coming months.  Given the coincident strength of the USD, we expect that EUR/USD could be drawn further below parity in the weeks ahead.”

“It is our view that the safe haven USD is likely to remain well supported until investors are willing to move back into risky assets.  This may be some months off.  This period will cover what is likely to be a testing winter for the Eurozone economy.  Even though further, potentially aggressive, rates hikes are widely expected from the ECB, it is our view that EUR/USD is in danger of dipping further towards 0.95.”

 

 

CHART

 

 

EURJPY Near Term: Upside favored

 

 

Technical View: Long position above 142.9. Target 143.81. Conversely, break below 142.9, to open 142.54.

Comments: The pair remains supported. Further advance favored.

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

Foodnotes:
https://www.reuters.com/markets/europe/dollar-stands-tall-focus-swings-back-fed-2022-09-15/
https://www.cnbc.com/2022/09/15/gold-stronger-dollar-federal-reserve-interest-rate-hikes.html
https://www.cnbc.com/2022/09/15/oil-markets-demand-supply-disruption.html
https://www.cnbc.com/2022/09/14/stock-market-futures-open-to-close-news.html
https://www.cnbc.com/2022/09/15/ether-falls-after-the-smart-contracts-network-completes-long-anticipated-merge.html
https://www.fxstreet.com/news/eur-usd-is-in-danger-of-dipping-further-towards-095-rabobank-202209151532
 

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