Russian rouble drops amid geopolitics

“Successful people do what unsuccessful people are not willing to do. Don’t wish it were easier; wish you were better.” — Jim Rohn

 

 

 

HEADLINES

 

 

 

• Dollar slips as positioning and technical selling weigh
• Rouble slips, Russia bonds drop as geopolitical concerns weigh
• Oil edges lower on profit-taking, rate hike worries
• Gold slips as yields edge up on Fed rate hike prospects
• Nasdaq, S&P fall with tech stocks out of favor
• Fed View: Rate hike in March; balance sheet runoff soon after – ABN AMRO

 

 

 

FOREX

 

 

 

Dollar slips as positioning and technical selling weigh

 

The dollar fell against a basket of currencies on Thursday to a two-month low, a day after data that showed an expected surge in U.S. consumer prices in December fell short of offering any new impetus for the Federal Reserve's policy normalization efforts.

The U.S. Dollar Currency Index , which tracks the greenback against six major currencies, was down 0.2% at 94.791, its lowest since Nov. 10. The index, which rose 6.3% in 2021, is down about 1% for the week, on pace for its worst weekly performance in about eight months.

 

Rouble slips, Russia bonds drop as geopolitical concerns weigh

 

Russia's rouble suffered its biggest drop in 15 months and its government bonds tumbled to a more than three-year low amid growing geopolitical concerns about Moscow's standoff with the West that also roiled Ukrainian assets.

The rouble dropped after Russian Deputy Foreign Minister Sergei Ryabkov said Washington's rejection of Moscow's key security demands was leading talks into a dead end.

 

 

 

COMMODITIES

 

 

 

Oil edges lower on profit-taking, rate hike worries

 

Oil prices edged lower on Thursday as investors took profits after two days of gains amid fears of aggressive U.S. interest rate hikes, but the losses were cushioned by expectations of a strong economic recovery that will boost demand in a tightly supplied market.

 

Gold slips as yields edge up on Fed rate hike prospects

 

Gold prices retreated on Thursday, as U.S. Treasury yields edged up with the Federal Reserve likely to raise interest rates in March. Expectations around a Fed interest rate hike lifted U.S. Treasury yields higher, potentially increasing the opportunity cost of holding non-yielding gold. Meanwhile, the number of Americans filing new claims for unemployment benefits increased to an eight-week high in the first week of January.

 

 

 

STOCKS

 

 

 

Nasdaq, S&P fall with tech stocks out of favor

 

The Nasdaq and S&P 500 were falling on Thursday as investors took profits from technology stocks ahead of the fourth quarter earnings season and after a three-session rally. The technology-laden Nasdaq had risen 1.7% in the last three sessions after falling 5.7% in the four prior trading days as investors watched the direction of interest rates.

 

 

 

ANALYSIS

 

 

 

Fed View: Rate hike in March; balance sheet runoff soon after – ABN AMRO

 

“With the December FOMC minutes last week providing confirmation that the Fed is likely to take a more aggressive approach to winding down its balance sheet, we now expect this to begin soon after the March lift-off, perhaps as soon as May.” 

“Initially, we expect this new round of QT to start at a slow pace of $15bn per month, with the pace doubling each month until it reaches a $60bn per month pace (this amount includes both Treasuries and MBS; the Treasury portion being c.$40bn).”

 

 

 

CHART

 

 

 

Aussie dollar / US dollar – 4-Hour Candlesticks

Source: GKFX Prime Metatrader 4

AUD/USD has broken above 0.727 resistance, which is now acting as support. The pair is dropping back from the top of a rising channel. - Prepared by Trading Writers*

 

 

 

CALENDAR

 

 

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

 

 

 

SOURCE

 

 

 

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/fed-view-rate-hike-in-march-balance-sheet-runoff-soon-after-abn-amro-202201130344
https://www.reuters.com/business/dollar-breaks-key-support-rates-outlook-seen-unchanged-by-inflation-data-2022-01-13/
https://www.reuters.com/business/energy/oil-struggles-hold-gains-amid-mixed-demand-view-2022-01-13/
https://www.reuters.com/markets/europe/gold-holds-near-one-week-high-after-us-inflation-data-2022-01-13/
https://www.reuters.com/world/us/futures-muted-ahead-data-delta-air-rises-strong-earnings-2022-01-13/