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Oil Slumps on Recession Fears as Stocks Tank

 

“Whether you think you can, or think you can’t – you’re right.” — Henry Ford 

 

 

HEADLINES

 

 

  • Sterling heads for third week of losses as dollar stands tall 
  • Gold set for weekly decline after Fed rate hike, dollar gains
  • Oil slumps 7% to four-week low on recession worries, strong dollar
  • Stocks eye steepest slide since 2020 as central bankers roil markets
  • Tesla investor sues Musk, board over accusation of workplace discrimination
  • EUR/GBP: Support at 0.8530/11 to hold for a retest of key resistance at 0.8722/47 – Credit Suisse
  • AUDUSD Near Term: Downside favored

 

 

Sterling heads for third week of losses as dollar stands tall 

 

 

Sterling fell on Friday in the face of a strengthening U.S. dollar, with the British currency giving up gains made a day earlier after the Bank of England raised interest rates. 

The pound fell as much as 0.5% against the dollar to $1.2290 , off from a one-week high of $1.2405 touched a day earlier. It was last at $1.23015 and heading towards a slight loss for the week, which would be its third straight week in the red.

The dollar index , which measures the currency against six peers including the yen, rose as much as 0.5% to 104.29, with the Japanese yen falling 2% after the Bank of Japan kept its ultra-easy monetary policy unchanged.

 

 

COMMODITIES

 

 

Gold set for weekly decline after Fed rate hike, dollar gains 

 

 

Gold fell on Friday and was on pace to post a more than 1% fall for the week, dented by a stronger dollar and hawkish policy signals from major central banks even as recessionary fears loom. 

Spot gold fell 1% to $1,838.19 per ounce. U.S. gold futures fell 0.5% to $1,840.9.

Making greenback-priced bullion less attractive, the dollar index rose on Friday, while benchmark U.S. 10-year Treasury yields also strengthened. “The spectre of even more incoming U.S. rate hikes, following the Fed’s jumbo-sized 75 basis point hike this week, should cap bullion’s near-term upside,” said Han Tan, chief market analyst at Exinity.

 

 

ENERGY

 

 

Oil slumps 7% to four-week low on recession worries, strong dollar 

Oil prices tumbled about 7% to a four-week low on Friday on worries that interest rate hikes by major central banks could slow the global economy and cut demand for energy.

Also pressuring prices, the U.S. dollar this week rose to its highest level since December 2002 against a basket of currencies, making oil more expensive for buyers using other currencies.

Brent futures fell $8.01, or 6.7%, to $111.80 a barrel by 2:04 p.m. EDT (1804 GMT), while U.S. West Texas Intermediate (WTI) crude fell $9.18, or 7.8%, to $108.41.

 

 

STOCKS

 

 

Stocks eye steepest slide since 2020 as central bankers roil markets 

 

 

World stocks whipsawed on Friday to edge closer to their worst week since markets' pandemic meltdown in March 2020, as leading central banks tightened policy in an effort to tame inflation, setting investors on edge about future economic growth. 

The biggest U.S. rate rise since 1994, the first such Swiss move in 15 years, a fifth rise in British rates since December and a move by the European Central Bank to bolster the indebted south all took turns in roiling markets.

The Bank of Japan was the only outlier in a week where money prices rose around the world, sticking with its strategy of pinning 10-year yields near zero on Friday.

 

 

Tesla investor sues Musk, board over accusation of workplace discrimination 

 

 

A Tesla Inc (TSLA.O) shareholder sued the electric car maker, Chief Executive Elon Musk and its board, accusing them of neglecting to tackle complaints about workplace discrimination and harassment, and engendering a "toxic workplace culture." 

Thursday's lawsuit is the latest against Tesla, which has been accused of racial discrimination and sexual harassment in its factories.

"Tesla has created a toxic workplace culture grounded in racist and sexist abuse and discrimination against its own employees," the investor, Solomon Chau, said.

 

 

ANALYSIS

 

 

EUR/GBP: Support at 0.8530/11 to hold for a retest of key resistance at 0.8722/47 – Credit Suisse 

 

 

“We continue to view weakness as corrective. Above 0.8638/45 can add weight to our view for strength back to 0.8671/73, ahead of a retest of 0.8722/47. Beyond here in due course should then add weight to our view a broader basing process is underway with resistance seen next at the ‘neckline’ to the 2020 top and 61.8% retracement at 0.8861/76.” 

“Below 0.8511 would see the uptrend break, but only below 0.8489/81 though would be seen to suggest the broader trend is shifting neutral again, with support seen next at 0.8457/43.” 

 

 

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 breaks below support.

 

Source: Trading Central 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar


Footnotes
https://www.reuters.com/markets/europe/sterling-slips-dollar-stands-tall-2022-06-17/
https://www.cnbc.com/2022/06/17/gold-markets-dollar-treasury-yield-inflation-economy-recession.html
https://www.reuters.com/business/energy/oil-edges-down-demand-concerns-weigh-heading-weekly-fall-2022-06-17/
https://www.reuters.com/markets/europe/global-markets-wrapup-1-2022-06-17/
https://www.reuters.com/business/finance/tesla-investor-sues-musk-board-over-accusation-workplace-discrimination-2022-06-17/
https://www.fxstreet.com/news/eur-gbp-support-at-08530-11-to-hold-for-a-retest-of-key-resistance-at-08722-47-credit-suisse-202206171331

 

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