iFOREX Daily Analysis : May 23,2017
iFOREX | May 23, 2017 05:16AM ET
The dollar fell against most major currencies on Monday, pressured by gains in the euro, after German Chancellor Angela Merkel said the single currency was “too weak”.
EUR/USD soared to a six-month high of $1.1263, as investors believed that Merkel’s comments would pressure ECB policymakers to consider tapering the central bank’s expansive monetary stimulus package, which includes very low interest rates.
Turmoil on the U.S. political stage is still leading investors to doubt whether President Trump would be able to deliver on his pro-growth agenda to boost the economy.
In the week ahead, investors will be looking at Wednesday’s Federal Reserve meeting minutes for fresh indications on the possible timing of the next U.S. rate hike.
Today, the euro zone is to publish survey data on private sector business activity, the Ifo Institute is to report on German business climate and Bank of England Governor Mark Carney and several other officials are to testify on inflation and the economic outlook before Parliament's Treasury Committee.
Later in the day, Canada is to release data on wholesale sales and the U.S. is to publish a report on new home sales.
EUR/USD
The euro jumped to fresh a six-month highs against the dollar on Monday, following Merkel’s comments that the single currency was “too weak”.
Investors believe that Merkel’s comments along with the recent positive economic data from Eurozone, would pressure ECB policymakers to consider tapering the central bank’s expansive monetary stimulus package, which includes ultra-low interest rates.
Today, euro zone data on private sector business activity is due, together with the Ifo Institute German business climate report. Later in the day, the focus will be shifted towards a report on new home sales.
Get The News You Want
Gold
Concerns over political turmoil in the U.S. continue to support safe haven demand, providing a boost to the precious metal on Monday, and bringing it to the highs of last week.
Gold continued to gain in Asia on Tuesday after a deadly explosion at a concert venue in Manchester was said to be a terror attack with reports suggesting that the government is rescheduling the June 8 polls for parliament.
Gold traders are now shifting their attention towards Wednesday’s FOMC minutes, for any clues on the future monetary policy steps of the Fed.
WTI Oil
Oil prices jumped to highs on Monday, as expectations soared for an extension of the supply-cut agreement, after Iraqi Oil Minister Jabar Ali al-Luaibi said on Monday he agreed with Saudi Arabia on the need to extend OPEC crude output cuts for a further nine months.
Saudi Energy Minister Khalid al-Falih offset market worries that OPEC members would not reach an agreement on an output cut extension on Thursday, after he said that he did not expect any resistance within OPEC to extending oil output cuts until March 2018
Oil ministers from the Organization of Petroleum Exporting Countries and other major producing countries will meet in Vienna on May 25 to conclude whether to extend their current production agreement beyond a June 30-deadline.
US 500
The main U.S. stock indices were higher on Monday, boosted by technology shares and by defense companies, which gained after the United States and Saudi Arabia signed a multi-billion dollar arms deal.
Trump visited Saudi Arabia over the weekend and sealed $110 billion in deals. Riyadh will buy U.S. arms to help it counter Iran, with options running as high as $350 billion over 10 years.
The S&P industrials index rose 0.7 percent and the S&P 500 posted a third straight day of gains, further recovering from last week's drop that was tied to concerns regarding U.S. President Donald Trump's domestic agenda.
In the week ahead, investors will be looking at Wednesday’s Federal Reserve meeting minutes for fresh indications on the possible timing of the next U.S. rate hike.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.