The USD extends its decline against other majors, after the Chair of the Fed Janet Yellen’s announcement in the end of March that the weaker US currency is essential to boost the earnings of the US transnational corporations. USDX, which shows the rate of the US Dollar to six overseas majors, fell to the lowest point since January 2015, now sticking around the 92.00 level. As Federal Reserve gradually secures its ends, Janet Yellen will probably be faced with more pressure from other board members to consider an earlier rate hike. According to CME futures data, the likelihood of a rate hike to 0.75% on June 15 rose from 1.2% to 13.1%, reflecting a point of view on the market that the world economy is now strong enough to deal with the stronger Dollar.
The Australian Dollar tumbled by more than 1.00%, as Reserve Bank of Australia suddenly decided to cool down the growing national currency by lowering interest rate from 2.00% to 1.75%. From January to April 2016, AUD rose by about 13% against the USD from 0.68 to 0.77, cutting the profits of national exporters. As prospects on crude market remain uncertain, strong commodity currencies may play a negative role in the economic recovery in respective countries.
EUR/USD rose by 0.58% to 1.1600 level, hitting the January 2015 peak. GBP/USD gains 0.21% to 1.4704, with a highest point at 1.4769 during Tuesday’s session, Brexit concerns seem to be brushed aside for now. USD/JPY drops by 0.60% to 105.77, finding support at 105.55 on Tuesday.
Commodities decline today, except gold, XAU/USD climbs by 0.29% to 1.1300 level, highest level since August 2014. A substantial upsurge of the safe haven commodity reflects the current growing risk-averse sentiments among investors.
After a short rally of Crude Oil during an earlier session, the bullish support disappeared, sending the prices into the red territory. WTI futures for June dropped by 0.60% to 44.51/barrel, while Brent declines by 0.37% to 45.66/barrel. Silver, Platinum and Palladium are also trading in the negative zone.
European indices sink on a sell-off of mining and energy stocks, FTSE 100 declined by 0.82%, Anglo American, Glencore, BHP Billiton and Rio Tinto are among the worst performers. Euro Stoxx 50 and German DAX decline by 1.75% and 1.89% respectively, Spanish IBEX lost 2.22% today.
Hang Seng closed with a 1.85% loss, Chinese CSI 300 gained 1.80%.
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