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Oil rises as dollar strength eases, but Fed weighs

 

 

Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better.”– Samuel Beckett 

 

 

HEADLINES

 

  • Pound struggles around $1.20 on economy worries
  • Gold ticks up as dollar eases; Fed move in focus
  • Oil rises as dollar strength eases, but Fed weighs
  • Nasdaq falls with U.S. dollar, oil rises ahead of Fed meeting
  • Strong dollar: 10 reasons why it matters to you
  • EUR/USD: Euro to remain under downward pressure in the near-term – MUFG
  • EURJPY Near Term: Upside favored

 

Pound struggles around $1.20 on economy worries 

 

Sterling held around the $1.20 level versus the U.S. dollar on Monday as traders worried about the outlook of the British currency after recent dismal data before a widely expected U.S. interest rate hike this week.

Versus the U.S. dollar, the pound held around $1.2040, a shade below Friday's high of $1.2064 which was the highest level in nearly three weeks. It briefly rose half a percent to the day's highs at $1.2085 before retracing its gains.

Against the euro , the pound was steady at 85.02 pence.

Britain's economy is feeling the strain of inflation which is on course to hit double digits, driven in large part by sky-rocketing fuel prices.

 

 

COMMODITIES

 

Gold ticks up as dollar eases; Fed move in focus 

 

Gold inched higher on Monday, buoyed by a slight dip in the dollar and lower bond yields with investors expecting the Federal Reserve to raise benchmark interest rate by 75 basis points later this week.

The dollar index edged 0.4% lower, making greenback-priced bullion less expensive for overseas buyers.

Gold is finding support from the weakness in the dollar and global bond yields as worries about the global economy have replaced inflation fears, said Fawad Razaqzada, market analyst at City Index.

 

 

ENERGY

 

Oil rises as dollar strength eases, but Fed weighs 

 

Oil prices rose on Monday, bolstered by supply fears, a dip in the U.S. dollar and stronger equity markets, but prices seesawed as some worried rising U.S. interest rates would weaken fuel demand.

Oil futures have been volatile in recent weeks, pressured byworries that rising interest rates could limit economic activity and thus cut fuel demand growth but supported by tight supply especially since Russia's invasion of Ukraineand Western sanctions on Moscow. 

 

 

STOCKS

 

Nasdaq falls with U.S. dollar, oil rises ahead of Fed meeting 

 

U.S. equities were choppy on Monday with Nasdaq (.IXIC) in decline ahead of a big week of technology earnings reports while oil prices rose and treasury yields edged higher as investors braced for a Federal Reserve interest rate hike later this week.

In currencies, the dollar index was down but holding above a 2-1/2 week low reached on Friday while gold prices inched higher.

Janet Yellen, the U.S. Treasury Secretary, said on Sunday that while U.S. economic growth was slowing a recession was not inevitable.

Treasury yields edged slightly higher as investors awaited the Federal Reserve's likely 75-basis-point interest rate increase later this week amid growing concerns about an economic slowdown and the potential for recession.

 

Strong dollar: 10 reasons why it matters to you 

 

All things to all people, the U.S. dollar leaves its imprint in every corner of the global economy: It is the currency in which vital raw materials are bought and sold, and it is the safe haven to which investors turn in times of trouble.

The greenback is now at a 20-year high against other world currencies, thanks in part to expectations that the Federal Reserve will increase its interest rates faster than most.

 

 

ANALYSIS

 

EUR/USD: Euro to remain under downward pressure in the near-term – MUFG 

 

“We expect the EUR to remain under downward pressure in the near-term driven by ongoing fears over disruption to the euro-zone economy from energy supply constraints and fragmentation risks.”

“The release of the euro-zone PMI surveys for July have further reinforced fears for a sharper slowdown/recession for the euro-zone economy in 2H of this year. We also expect Italian bond yields to continue experiencing upward pressure ahead off the snap elections to be held on 25th September.”

“We are not expecting the ECB to step in to support the Italian bond market in response to higher political uncertainty unless yields spike higher. We expect these negative factors to outweigh the ECB’s more front-loaded tightening.”

 

 

CHART

 

EURJPY Near Term: Upside favored

 

Technical View: Long position above 138.92. Target 140.91. Conversely, break below 138.92, to open 138.19.

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/markets/europe/pound-struggles-around-120-economy-worries-2022-07-25/
https://www.reuters.com/article/global-precious/precious-gold-ticks-up-as-dollar-eases-fed-move-in-focus-idUSL4N2Z61IX
https://www.reuters.com/business/energy/oil-falls-concerns-expected-fed-hike-will-impact-fuel-demand-2022-07-25/
https://www.reuters.com/markets/europe/global-markets-wrapup-1-2022-07-25/
https://www.reuters.com/markets/europe/strong-dollar-10-reasons-why-it-matters-you-2022-07-25/
https://www.fxstreet.com/news/eur-usd-euro-to-remain-under-downward-pressure-in-the-near-term-mufg-202207221700