America Roundup: US Dollar Hits 2+ Year High on Fed Rate Hike Outlook, Wall Street Crashes, Gold Falls 1%, Oil Falls, Poster a weekly loss of nearly 5% on growth concerns-23, 2022

Market overview

• Retail sales in Canada (monthly) 0.1%, -0.4% forecast, 3.2% previous

• RMPI Canada March (monthly) 11.8%, previous 6.0%

• Canadian core retail sales (monthly) in February 2.1%, forecast 0.1%, previous 2.5%

• US manufacturing PMI for April 59.7, 58.2 forecast, 58.8 previous

• US Apr Markit Composite PMI 55.1, 57.0 forecast, 57.7 previous

• US Apr Services PMI 54.7, 58.0 forecast, 58.0 previous

• US Baker Hughes Total Rig Count 695, previous 693

• The American oil platform Baker Hughes has 549,548

Future Outlook – Economic Data Coming Soon (GMT)

• No data forthcoming

Looking Ahead – Economic Events and Other Announcements (

• No significant event

Currency summaries

EUR/USD: The euro fell against the dollar on Friday after European Central Bank officials made mixed comments amid expectations of a 50 basis point (bp) rate hike from the Federal Reserve supported the US dollar. ECB President Christine Lagarde sent dovish signals saying the central bank may have to cut its growth outlook. This followed ECB diving Luis de Guindos, who joined a growing number of ECB policymakers in calling for an early end to the asset purchase program coupled with a rate hike in July. Eurozone PMI data showing an unexpected acceleration in corporate growth this month did not provide any immediate additional direction to the market. Against the US dollar, the euro fell 0.2% to $1.0794. Immediate resistance can be seen at 1.0831 (38.2% fib), a break up can trigger a rise towards 1.0889 (50% fib). On the downside, immediate support is seen at 1.0766 (23.6% fib), a break below could take the pair towards 1.0700 (psychological level).

GBP/USD: The pound weakened against the dollar on Friday after data showed the UK private sector suffered a sharp slowdown this month as high inflation and the conflict in Ukraine weighed on the sector of the country’s giant services. The preliminary composite S&P Global/CIPS Purchasing Managers’ Index (PMI) fell to a three-month low of 57.6 in April from 60.9 in March. Economists polled were mostly expecting a smaller decline to 59.0. A separate survey released earlier on Friday showed consumer confidence near its lowest level since records began nearly 50 years ago. Immediate resistance can be seen at 1.2915 (38.2% fib), a break up can trigger a rise towards 1.2991 (50% fib). On the downside, immediate support is seen at 1.2832 (23.6% fib), a break below could take the pair towards 1.2800 (psychological level).

USD/CAD: The Canadian dollar posted its biggest decline against the greenback in five months on Friday, as oil prices fell and investors weighed the prospect of an interest rate hike by the Reserve federal government and the Bank of Canada to fight inflation. The loonie fell 1% to 1.2710 per greenback, its biggest drop since November last year. The currency touched its lowest level since March 16 at 1.2726 and was down 0.8% for the week, its fourth consecutive week of decline. The price of oil, one of Canada’s top exports, has been dragged down by the prospect of higher interest rates, weaker global growth and COVID-19 lockdowns in China, hurting on demand. U.S. crude futures settled down 1.7% to $102.07 a barrel. Immediate resistance can be seen at 1.2720 (38.2% fib), a break up can trigger a rise towards 1.2799 (23.6% fib). On the downside, immediate support is seen at 1.2663 (50%fib), a break below could take the pair down to 1.2604 (61.8%fib).

USD/JPY: The dollar strengthened against the yen on Friday as the dollar continued to gain support from comments by Federal Reserve Chairman Jerome Powell on Thursday that appeared to support a half-percentage-point tightening at next month’s policy meeting, as well as his remarks on a likely back-to-back rate hike this year. The dollar index, an indicator of the value of the greenback against six major currencies, hit 101.33, the highest since March 2020. It last rose 0.6% to 101.16 , the biggest daily percentage gain since mid-March. So far this year, the dollar index has gained 5.7%. Against the yen, the dollar gained 0.2% to 128.55 yen. The yen is still within striking distance of its weakest level since April 2002 at 129.43 yen to the dollar hit on Wednesday. Strong resistance can be seen at 129.30 (23.6% fib), a break up can trigger a rise towards 129.44 (BB upper). On the downside, immediate support is seen at 126.77 (38.2% fib), a break below could take the pair towards 126.18(14DMA).

Summary of actions

European stocks sagged on Friday as traders stepped up bets on higher interest rates following hawkish comments from central bank officials, while German software giant SAP and French products company Kering luxury goods fell after sluggish first-quarter results.

Britain’s benchmark FTSE 100 closed down 1.39%, Germany’s Dax ended down 2.48%, France’s CAC ended the day down 1.99%.

Wall Street fell more than 2.5% on Friday, ensuring all three major benchmarks ended in negative territory for the week, as further earnings surprises and heightened certainty around aggressive interest rate hikes short-term interest have taken their toll on investors.

The Dow Jones closed 2.85%, the S&P 500 closed 2.77%, the Nasdaq stabilized 2.55%.

Summary of treasury bills

Short-term U.S. Treasury yields hit new three-year highs on Friday, a day after Federal Reserve officials, including Chairman Jerome Powell, signaled the U.S. central bank would aggressively raise interest rates to stem the rise in inflation.

Yields on two-year notes, which are very sensitive to changes in interest rates, rose to 2.789%, the highest since December 2018, before falling back to 2.713%. Benchmark 10-year yields were last at 2.905%, after hitting 2.981% on Wednesday, also the highest since December 2018.

Summary of raw materials

Oil slid on Friday, posting a weekly loss of almost 5%, on the prospect of weaker global growth, higher interest rates and COVID-19 lockdowns in China, which hurt the economy. demand even as the European Union considers a Russian oil ban that would tighten supply.

Brent crude settled down $1.68, or 1.6%, at $106.65 a barrel. U.S. West Texas Intermediate (WTI) crude fell $1.72, or 1.7%, to settle at $102.07.

Gold fell 1% on Friday and was expected to see its biggest weekly decline since mid-March as signs of faster policy tightening from the U.S. Federal Reserve pushed Treasury yields and the dollar higher.

Spot gold was down 0.8% at $1,936.14 an ounce as of 12:21 a.m. ET (4:21 p.m. GMT), after hitting a two-week low. The metal has lost 1.9% so far this week. US gold futures fell 0.5% to $1,938.70.

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