The US Dollar closed on Thursday session slightly below the support level of 100.50, despite the mixed updates on the labour market in the US. According to data, the number of building permits issued in January rose faster than expected boding well for economy growth, while the report on jobless claims fell short of expectations. The data had little effect on the currency, as investors’ focus is maintained on the statements of Trump and comments of FED officials. From the standpoint of technical analysis, then the Dollar was in a sell off the whole of January and after the retracement from of 99.50 to the level of 101.50, the downside bias is again growing on the currency.
The yields on 10-year Treasuries also echoes the dynamics of the US Dollar declining the second day in a row, despite the optimistic statements of the rate-setters at FED. F. Stepping back from the level of 2.5% per annum yield retreated by 6 basis points to 2.44% after the statements of Yellen and New York Fed’s head Dudley that despite the prospects of accelerated growth, only gradual rate hikes are warranted.
Pound traders are bracing for the retail sales report which is projected to fall from 4.9% to 3.9% in annual terms. Brexit talks subsided for a while and incoming economic data makes Pound float around the key level of 1.25. According to BoE head, Carney rate increase can be expected in the absence of disappointing data on inflation and the labour market, while today’s report could make a significant contribution to the expectations of changes in the monetary policy.
Oil prices rose slightly after the reports that OPEC is still not certain if the production cuts had enough positive impact on the global supply balance. According to Reuters sources, OPEC officials are considering the option of extending the program with lowered output to eliminate the oversupply in the market. On the other hand, according to IEA, the global oil market is oversaturated, as the supplies exceed the target level by 286 billion barrels. OPEC may need another six months for lowered output to bring the market into equilibrium.
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