Silver recovered further to $30.60 in Thursday’s Asian trading. The white metal discovers strong buying interest, as normalising US labour market conditions boost speculation that the Federal Reserve will start reducing interest rates in the September meeting. The CME FedWatch tool shows that traders see a 68% chance for rate cuts in September. The probability … Read more
USDJPY bulls are further encouraged by a weakening Japanese Yen following data that shows real wages declining for the 25th straight month in April, as domestic inflation in Japan continues to outpace wage growth. The data will make it harder for the Bank of Japan to normalise policy, as it hopes to lift the bank’s … Read more
Silver (XAG/USD) declined below .00 in Tuesday’s European session as the DXY Dollar Index rebounded. The speculation for the Fed reducing interest rates in September has strengthened due to signs of economic slowdown in the US.
The drop in crude oil prices is attributed to OPEC+ announcing a gradual plan to ease some of their oil production cuts.
– Markets remain subdued on the first trading day of June
– S&P Global will release revisions to May Manufacturing PMI data for Germany, Eurozone, UK, and US
– US Bureau of Economic Analysis reported inflation rose 2.7% on a yearly basis in April
– US Dollar struggled to preserve its strength following PCE inflation data
– EURUSD edged higher and closed the week virtually unchanged
– GBPUSD failed to make a decisive move in the previous week
– Bank of Japan has no plans to immediately unload its ETF holdings
– China’s Caixin Manufacturing PMI edged higher to 51.7 in May
– AUDUSD pair showed no reaction to China’s PMI data
– Gold continues to move sideways above ,320
The euro is experiencing a third successive decline against the pound sterling, with the EURGBP pair rising sharply at 0.8531, notching a 0.26% gain. Eurozone inflation data, both headline and core HICP, exceeded forecasts, potentially impacting the timing of the ECB’s easing cycle. Spain’s HICP data came in higher than expected at 3.8% YoY, while Germany’s HICP harmonised inflation rate increased to 2.8% YoY. The EU’s block figures also rose, indicating unexpected inflation pressures that may lead the ECB to reconsider its dovish stance.
Key data releases include the Harmonised Index of Consumer Prices (HICP) from Eurostat, the Personal Consumption Expenditures (PCE) Price Index from the US Bureau of Economic Analysis, and first-quarter Gross Domestic Product (GDP) data from Canada.
Silver found temporary support near .20 after correcting from a weekly high of .30. The Dollar declined further after the U.S. Department of Labor reported higher jobless benefits claims for the week ending May 24. The slower US growth rate in the first quarter also weighed on the Dollar. The DXY Dollar Index corrected further to 104.76. A downside move in the US Dollar is favorable for dollar-denominated assets such as silver. The uncertainty over the near-term outlook of silver remains ahead of the U.S. core Personal Consumption Expenditure Price Index data for April. The Federal Reserve’s preferred inflation gauge will influence speculation for Fed rate cuts in September. Financial markets expect the Fed to start reducing interest rates from the last quarter of the year.
The GBPUSD pair weakened to 1.2695 in early Asian trading on Thursday due to a stronger US Dollar supported by higher US yields and lower bets of a Federal Reserve rate cut in September.
The EURUSD pair fell to 1.0830 in European trading after failing to reach a two-month high near 1.0900. ECB governing council member Klaas Knot suggested a gradual rate-cut approach based on recent data showing wage growth and improved Manufacturing PMI. The Dollar’s DXY Index recovered to 104.80 due to market sentiment. Investors are now expecting the Fed to start reducing interest rates in the last quarter of the year.