2024-03-06 09:29

Copyrighted Image by: Reuters. Investing.com - The U.S. dollar slipped lower in early European trade Wednesday, in cautious trading ahead of congressional testimony from Federal Reserve Chair Jerome Powell which should provide more cues on U.S. monetary policy. At 04:30 ET (09:30 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% lower at 103.602, after falling from three-month highs over the past two weeks. Powell to appear before Congress The dollar received a hit on Tuesday after data showed U.S. services industry growth eased in February, but losses are minor as investors await the start of Federal chief Powell’s two-day testimony in front of Congress. Powell appears before a House committee on Wednesday, and a Senate panel on Thursday, and is expected to reiterate that policymakers will stick to a cautious approach in deciding when to begin lowering interest rates given persistent price pressures. “We think Chair Powell may not be quite as hawkish as some think today and we see some downside risks to the dollar,” said analysts at ING, in a note. That said, any losses are likely to be curtailed ahead of Friday’s keenly-awaited monthly jobs report. Signs of continued strength in the labor market could make it harder for investors to shrug off concerns about how a stronger-than-expected economy could reignite inflation if the Fed begins easing too soon. Euro boosted by German export growth In Europe, EUR/USD traded 0.2% higher at 1.0873, with the euro helped by better than expected German trade data, raising hopes that the slowdown in the performance of the eurozone’s dominant economy may be coming to an end. German exports rose more than expected at the start of the year, rigging 6.3% in January compared with the prior month, thanks to rising demand from European Union countries and China. The ECB meets to set monetary policy on Thursday but is widely expected to leave interest rates at a record 4%. “We think there are some downside risks to the euro from tomorrow's European Central Bank meeting,” said ING. “As such, should today's US event risk prove a dollar negative, we think EUR/USD will still struggle to sustain a break over 1.0900.” GBP/USD traded 0.2% higher at 1.2728, ahead of the U.K. Spring Budget later in the session, with Chancellor Jeremy Hunt seemingly under pressure to cut taxes in an attempt to boost his party’s waning popularity ahead of a probable 2024 election. However, the gilt turmoil of September 2022 remains fresh in the memory– when former Prime Minister Liz Truss and her then Chancellor Kwasi Kwarteng spooked the markets with promises of unfunded tax cuts–and thus Hunt may have limited scope for moves. Yen edges higher, below Y150 level In Asia, USD/JPY traded 0.2% lower to 149.81, with the yen firming slightly below the 150 level, helped by the dollar weakness. The focus remains on when the Bank of Japan could potentially begin raising interest rates. USD/CNY traded 0.1% higher at 7.1993, close to breaking above the 7.2 level with sentiment towards Asia’s largest economy remaining weak after the Chinese government set a 2024 gross domestic product target of 5%, the same as 2023, and offered scant cues on more policy support for the economy. AUD/USD rose 0.2% to 0.6516 after data showed Australian fourth-quarter GDP grew as expected, showing that strong government and capital spending helped offset a sharp decline in personal consumption. https://www.investing.com/news/forex-news/dollar-edges-lower-ahead-of-powell-testimony-euro-helped-by-german-exports-3326095

2024-03-06 05:56

Copyrighted Image by: Reuters Investing.com-- Bitcoin pared a bulk of its losses in Asian trade on Wednesday, remaining within sight of a record high as steady capital flows into U.S. spot exchange-traded funds and anticipation of a “halving” event kept buyers in play. The world’s largest cryptocurrency was trading down 1.9% at $66,022.9 by 00:41 ET (05:41 GMT), after hitting a record high of $69,063 on Tuesday, according to Investing.com data. The token had fallen almost immediately after hitting a peak, sinking as low as $59,000 before paring its losses. Gains in Bitcoin come amid consistent capital flows into the recently-approved spot ETFs in U.S. markets. Data released earlier this week showed U.S. crypto products seeing a fifth straight week of inflows, with Bitcoin products commanding the lion’s shares of inflows. The spot ETF approval appeared to have drawn a deluge of institutional investors into crypto. Bitcoin was also buoyed by anticipation of a “halving” event in April, which will see the rate of generation of new Bitcoin being slashed in half, limiting fresh supply. Bitcoin’s highs mark a new record after November 2021. But in the interim, it had fallen drastically as the crypto industry was rattled by a string of high-profile frauds and bankruptcies. Still, the token has now risen more than four-fold from a low of about $15,000 hit in November 2022, in the aftermath of the FTX debacle. Bitcoin also surged about 150% through 2023. “The move has just gone parabolic, it just can’t continue like it has for so long, and we’re starting to see signs of a little bit of maturity in the move we’ve seen to date, but that doesn’t mean that it’s a reversal,” Tony Sycamore, market analyst at IG said in an interview with Ausbiz. “At this point of time, if we get the weekly candle closing where it is now, which is around $63-$64,000, I think that does signify that it’s come a long way now.” Still, trading volumes in Bitcoin remain well below highs seen during 2021 and 2022, in the aftermath of the bull run. Relatively low volumes have also been attributed for the token’s massive run-up over the past year. The token is still seen as far too volatile by a bulk of investors, with the retail sector having largely moved out of Bitcoin over the past year. The spot Bitcoin ETF approval this year, however, was a positive move for the broader crypto industry, which was otherwise grappling with a massive loss of faith. https://www.investing.com/news/cryptocurrency-news/bitcoin-pares-losses-hovers-around-65k-after-recordhigh-run-3325891

2024-03-06 05:21

Copyrighted Image by: Reuters. Investing.com-- Gold prices fell from record highs in Asian trade on Wednesday as traders remained on edge before a closely-watched testimony from Federal Reserve Chair Jerome Powell, although a rout in risk-driven markets pointed to more safe-haven demand. The yellow metal shot up to record highs on Tuesday, buoyed by a mix of safe haven demand and persistent expectations that U.S. interest rates will eventually come down in 2024. Spot gold fell 0.1% to $2,126.31 an ounce, while gold futures expiring in April fell 0.4% to $2,134.25 an ounce by 23:59 ET (04:59 GMT). Spot gold hit a record high of $2,142.15 an ounce, while gold futures hit a peak of $2,150.50 an ounce on Tuesday. “It appears that many investors have been left out by the recent move higher, and with the rising risk of a stock market correction, have decided to move into gold,” analysts at ANZ wrote in a note. Gold’s Tuesday bounce came amid sharp losses in Wall Street, as stocks faced some correction at record high. Powell testimony awaited, gold outlook uncertain Markets were now awaiting a two-day testimony from Fed Chair Jerome Powell, beginning later in Wednesday, for more cues on U.S. interest rates. Powell is expected to largely maintain his hawkish rhetoric and offer scant cues on interest rate cuts, especially as U.S. inflation remains sticky. Several Fed officials also warned in recent weeks that the Fed was in no hurry to begin trimming rates. The prospect of higher U.S. rates has limited any major upside in gold over the past year, with the yellow metal having rapidly fallen after hitting record highs in December. This trend could also put a timer on gold’s current rally, especially if Powell signals more hawkish than markets are expecting. Other precious metals were mixed, and largely lagged gains in gold this week. Platinum futures rose 0.5% to $89.60 an ounce, while silver futures fell 0.5% to $23.858 an ounce. Still, despite uncertainty ahead of Powell, traders largely maintained their bets that the Fed will cut rates by 25 basis points in June, according to the CME Fedwatch tool. Beyond Powell, focus this week is also on nonfarm payrolls data for February. Copper prices muted as China uncertainty persists Among industrial metals, copper futures expiring in May steadied around $3.8518 a pound. The red metal saw little movement after China’s economic outlook for 2024 largely underwhelmed, as did Beijing providing scant cues on more policy support for the economy. https://www.investing.com/news/commodities-news/gold-prices-fall-from-record-highs-but-risk-aversion-limits-losses-3325886

2024-03-06 04:21

Copyrighted Image by: Reuters. Investing.com-- Most Asian currencies moved little on Wednesday, while the dollar steadied from recent losses as markets hunkered down in anticipation of more key cues on U.S. monetary policy. Sentiment towards Asian markets also remained largely weak following middling economic signals from China. The region’s largest economy set a 2024 gross domestic product target of 5%, the same as 2023, and offered scant cues on more policy support for the economy. The Chinese yuan fell slightly and was close to breaking above the 7.2 level. The Japanese yen firmed slightly below the 150 level, seeing some safe haven plays as broader financial markets, particularly stocks, tumbled on Tuesday. Focus was also on when the Bank of Japan could potentially begin raising interest rates. Australian dollar rises on steady Q4 GDP The Australian dollar was among the better performers for the day, rising nearly 0.2% as data showed fourth-quarter GDP grew as expected. The reading showed that strong government and capital spending helped offset a sharp decline in personal consumption. But this trend is expected to wear thin in the coming months, with slowing consumption likely to put more pressure on the economy. Slowing consumption also heralds more declines in inflation- a scenario that could eventually see the Reserve Bank trim interest rates. Commonwealth Bank of Australia (OTC:CMWAY) analysts said on Wednesday that they expect the RBA to cut rates by 75 basis points in 2024- a scenario that bodes poorly for the Australian dollar. Other Asian currencies kept to a tight range on Wednesday. The South Korean won fell 0.1% even as consumer inflation read hotter than expected for February. The Singapore dollar was flat, as was the Indian rupee. Dollar steadies ahead of Powell testimony The dollar index and dollar index futures both moved little in Asian trade on Wednesday after falling from three-month highs over the past two weeks. Focus was squarely on a two-day testimony from Federal Reserve Chair Jerome Powell, who is widely expected to maintain his hawkish rhetoric on interest rates. Powell’s testimony also comes after a chorus of Fed officials warned that the bank was in no hurry to cut interest rates in the face of sticky inflation. Still, traders largely maintained their bets on a 25 basis point cut in June, according to the CME Fedwatch tool. Beyond Powell, nonfarm payrolls data for February is also on tap this week. https://www.investing.com/news/forex-news/asia-fx-muted-dollar-steadies-with-powell-testimony-on-tap-3325860

2024-03-06 01:56

Copyrighted Image by: Reuters. Investing.com-- Oil prices settled higher Wednesday, as a smaller-than-expected increase in crude supplies pointed to improving demand just as Fed chief Jerome Powell reinforced expectations for rate cuts this year. By 14:30 ET (19.30 GMT), the U.S. crude futures rose 1.3% to settle at $79.13 a barrel and the Brent contract climbed 1.1% to $82.96 a barrel. US inventories grow less than expected Inventories of U.S. crude rose by roughly 1.4 million barrels in the week ended Mar. 1, below estimates of an increase of 2.4M barrels, and less than the huge 4.2M barrels build seen in the prior week amid growing signs that refinery action continues to improve. Refinery activity rose 3.4% to 84.9% as U.S. refineries restarted production after an extended winter and maintenance break- a trend that is expected to further tighten crude markets in the world’s biggest fuel consumer amid rising gasoline demand. Gasoline inventories, one of the products that crude is turned into, fell 4.5M barrels against expectations of a draw of 1.6M barrels with distillate stockpiles down 4.1M barrels, compared with expectations for a decline of about 1M barrels. Powell sees rate cuts later in year, stoking demand hopes Adding to the positive news Wednesday, Fed chief Powell stated that the rate-setting Federal Open Market Committee "does not expect that it will be appropriate" to slash borrowing costs down from more than two-decade highs at this point. However, Powell also noted that the Fed's recent tightening cycle is "likely" at its peak, adding that, should the economy evolve as expected, "it will likely be appropriate to begin dialing back policy restraint at some point this year." A cut in interest rates would likely stimulate activity in the world's largest consumer of energy. Red Sea tensions rise as tighter supply optimism gains Tensions in the Red Sea, a key oil shipping route, ratcheted up and raised supply disruption fears after a Houthi missile attack struck a Greek-owned cargo ship, near Yemen, killing at least two people. The attack added to fears about potential oil supply disruptions and fueled hopes about tighter global supplies in the wake of the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, recent announcement to extend output cuts of 2.2 million barrels per day until the end of the second quarter. https://www.investing.com/news/commodities-news/oil-prices-dip-amid-china-concerns-tighter-supply-outlook-3325824

2024-03-05 22:05

Copyrighted Image by: Reuters Investing.com -- U.S. crude stockpiles increased less than expected, the API reported Tuesday, pointing to a pick-up in demand following weeks of much stronger-than-expected increases.. Crude Oil WTI Futures, the U.S. benchmark, traded at $78.45 a barrel following the report after settling down 0.9% at $78.02 a barrel. U.S. crude inventories rose by about 423,000 barrels for the week ended Mar. 1, compared with a build of 8.4M barrels reported by the API for the previous week. Economists were expecting an increase of about 2.6M barrels. The API data also showed that gasoline inventories fell by about 2.8M barrels, and distillate stockpiles fell by 1.8M barrels, compared with expectations for a decline about 1.4M barrels and 400,000 barrels, respectively. The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies increased by about 2.6M barrels last week. https://www.investing.com/news/commodities-news/oil-inventories-rise-by-423000-barrels-last-week-api-3325613