What you need to know on Friday, June 25:
The dollar shed some ground throughout the first half of the day, to recover most of it during the American session. Generally speaking, trading was dull. The EUR/USD pair held within familiar levels above the 1.1900 figure, while commodity-linked currencies consolidated against their American rival.
US data was mostly encouraging, although most of the figures missed the market’s expectations. Initial Jobless Claims for the week ended June 19 printed at 411K, while the previous weekly figure was revised to 418K. Durable Goods Orders were up 2.3% in May, while the Q1 Gross Domestic Product was confirmed at 6.4%. The numbers indicate that the US economic recovery may have reached a plateau. It’s not bad news but may prevent the greenback from strengthening further.
The pound was the worst performer, falling after the BOE’s monetary policy announcement. As widely anticipated, policymakers left rates and easing programs on hold. However, the accompanying statement offered a dovish tone. “The Committee does not intend to tighten monetary policy at least until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.” Market players were looking for a hawkish tilt, included some hints on when tapering may begin. GBP/USD trades around 1.3910.
Gold came under selling pressure during the US afternoon, as Wall Street flirted with record highs. The rally in equities was backed by US President Joe Biden’s announcement, as he said that they reached a bipartisan deal on the infrastructure spending plan. The bright metal settled at around $1.775.00 a troy ounce.
Crude oil prices bounced from intraday lows, posting modest daily losses. WTI settled at # 73.10 a barrel.
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