OANDA Market Insights podcast (episode 74)

OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. No: 0325821. Please refer to the NFA’s FOREX INVESTOR ALERT where appropriate.

OANDA (Canada) Corporation ULC accounts are available to anyone with a Canadian bank account. OANDA (Canada) Corporation ULC is regulated by the Investment Industry Regulatory Organization of Canada (IIROC), which includes IIROC’s online advisor check database (IIROC AdvisorReport), and customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.

OANDA Europe Limited is a company registered in England number 7110087 limited by shares with its registered office at Tower 42, Floor 9a, 25 Old Broad St, London EC2N 1HQ and is authorised and regulated by the Financial Conduct Authority, No: 542574.

OANDA Asia Pacific Pte Ltd (Co. Reg. No 200704926K) holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore and is also licenced by the International Enterprise Singapore.

OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and provides and is the issuer of the products and/or services on this website. It’s important for you to consider the current Financial Service Guide (FSG), Product Disclosure Statement (‘PDS’), Account Terms and any other relevant OANDA documents before making any financial investment decisions. These documents can be found here.

OANDA Japan Co., Ltd. First Type I Financial Instruments Business Director of the Kanto Local Financial Bureau (Kin-sho) No. 2137 Institute Financial Futures Association subscriber number 1571.

Dollar mixed and Stocks Fall as markets brace for more global easing

US stocks slipped from record highs following a wrath of mixed earnings results and despite a strong signal from Federal Reserve officials that they are ready to cut interest rates at the end of the month.  With over 15% of the companies in the S&P 500 already reporting second quarter results, investors are hardly celebrating the roughly four-fifths of them posted earnings beats.  The S&P 500 finished the week 1% lower, despite rising easing expectation signals from both the Fed and ECB and positive trade banter from President Trump.  The dollar has not tanked as Fed officials do not seem ready just yet to deliver bolder action.  With a strong string of economic surprises with labor, inflation and retail sales, it seems the market will need another wave of US data deterioration before seeing policymakers signal a more dovish outlook.

Next week the focus will fall heavily on the global manufacturing PMI data, the ECB rate decision and the US advance reading of second quarter GDP.  Tuesday, we should find out if Boris Johnson becomes the next UK PM.  On Wednesday, Eurozone and Germany manufacturing data is expected to improve but remain in contraction territory, while both service readings are expected to soften but remain in expansion territory.  On Thursday, the German IFO survey is expected to see small improvements with business climate and expectations.  Thursday will also see a couple big rate decision from the ECB and Turkish central bank.  The ECB should switch to easing mode and queuing up fresh moves in September, while the CBRT will cut rates.  On Friday, the first reading of US Q2 GDP is expected to fall to 1.8%, the range of estimates is currently 1.4% to 2.5%.  A stronger the expected drop in GDP will likely cement expectations for four rate cuts to occur over the next year.  A 2.0% or better reading could see rate cut bets fall to two for the remainder of the year.

  • ECB to queue up rate cuts and restart of bond buying program
  • FOMC rate cut bets could surge if the US advance Q2 GDP declines sharper than expected
  • Gold continued support from lack of trade progress and tensions in Persian Gulf

GBP 

The UK will finally have a new prime minister on Tuesday after 180,000 members of Britain’s conservative party ballots are tallied.  Boris Johnson, a huge front-runner is expected to take over on Wednesday and will face an uphill battle as Tory rebels will try to block Johnson’s no-deal Brexit threat.

This week, BOE Gov Carney noted that divergent outlooks are not unsurprising and that officials will explore how to best illustrate market sensitivities. The Treasury Committee also asked the BOE and Treasury to Brexit economic analysis that presented last November.  Monetary policy decisions will likely remain on hold until we have further Brexit clarity.

ECB

The ECB observed a quiet period ahead of next week’s rate decision. Press reports circulated that that they could revamp their inflation target, a move that would embolden policymakers to easy policy for much longer.  Changes to the inflation target are expected along plans to restart the government bond buying program by November.

Oil

Crude prices will look to see if they can muster up a rebound as geopolitical risks remain high and as the Fed and other major central banks prepare to open the floodgates of easy money.

Tanker seizures and drones getting shot down will remain common themes that should keep the situation tense in the Persian Gulf and possibly lead to some crude shipping disruptions.  Friday’s news that Iran’s Revolutionary Guard seized a British tanker helped squash some optimism that we could see Iran return to the negotiating table.

Oil prices will also pay see limited downward pressure on global manufacturing PMI misses as expectations grow for most of the major central banks poised to deliver stimulus.  In 1995, when the Fed finally delivered a rate cut in hope of securing a soft landing, oil prices nearly doubled.

Gold

Gold prices came off six-year highs as investors await the next major development with the trade war or Persian Gulf tensions.  Gold’s strong run over the past couple weeks stemmed from dovish banter from the Fed, ECB and PBOC.  Institutional investor interest is also growing as low interest rate policy (negative for some) appears to be locked in for the foreseeable future and geopolitical risks remain high,

Bitcoin

Bitcoin’s initial rally that stemmed from the interest of Facebook’s Libra currency galvanized regulatory interest that will create major hurdles for all cryptocurrencies.  We will likely continue to see the focus remain on regulatory side as CFTC will continue to ramp up crackdown efforts for digital coins.

Bitcoin’s wild ride continues as investors seem unfazed by random 10% swings.  If Bitcoin can continue to stabilize next week, we could see bullish momentum return as sellers will continue to unwind short positions.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏

Ed Moya

Ed Moya

USD/CAD Canadian Dollar Trade Lower on Rising US dollar and Weak Retail Sales

The Canadian dollar fell 0.28 percent on Friday after the US dollar got its mojo back on the back of the clarification of NY Fed President John Williams comments from yesterday. The US dollar fell on Thursday after the NY Fed chief urged the central bank to be more pro active on monetary policy and implied it was better to act now than later.

The NY Fed clarified the comments and said they were “academic” in nature, and not to be taken into the same context as current monetary policy decisions. The loonie had climbed after a deeper interest rate cut was priced in based on Williams’ comments and now the retraction of sorts, put downward pressure on the Canadian currency.

Canadian dollar weekly graph July 15, 2019

Retail sales in Canada disappointed with a 0.3 percent miss for the core reading and 0.1 loss on the headline data point. Bad weather is blamed for the underperformance, but there was the bright side of the temporary nature of the negative factor.

The US dollar rebounded on Friday after NY Fed Chief’s comments on pro active action on interest rates were “academic” and not intended for immediate policy action. A rate cut is still heavily anticipated on July 31, but the chance that it will be 50 basis points has gone down after the clarification from the monetary policy maker.

The USD will finish the week mixed against major pairs. Safe haven currencies and commodity currencies (except the CAD) will finish ahead of the US currency. European major pairs and the loonie will remain under pressure agains the US dollar.

OIL – Low Demand Concerns Put Crude Under Pressure

Oil prices traded in a tight range on Friday despite rising tensions between the US and Iran. The US claims that Iran shot down one of its drones and the news that Iran had seized a British tanker stoked fears of free passage in the Strait of Hormuz.

Prices moved during the day, but overall ended back at the same spot due to lower demand forecasts from the International Energy Agency. The Organization of the Petroleum Exporting Countries (OPEC) , the Energy Information Administration (EIA) and now the IEA have downgraded their demand forecasts putting enormous downward pressure on crude prices.

Brent recorded a 6.29 percent loss and West Texas Intermediate fell 7.37 percent in the last five trading days. Supply disruptions had pushed prices higher, and with the easing of US-Iran concerns after a more diplomatic path was drawn out, and Gulf of Mexico operations getting back on-line after Storm Barry, crude traded lower.

GOLD – Yellow Metal Ends Lower on Friday, but Ahead on a Weekly Basis

Gold fell 0.2 percent on Friday, but rising uncertainty once again proved the value of the metal as it rose close to 1 percent on weekly trading. As the July Federal Open Market Committee (FOMC) meeting approaches the market is fully pricing in a rate cut. The question becomes how deep will the Fed slash interest rates. The dollar rebounded on Friday, as NY Fed President John Williams’ quotes from Thursday were clarified by the central bank.

The market has grown accustomed to dovish rhetoric from the US central bank, after the Fed did a 180 on its monetary policy path, and is now on the verge of its first rate cut of an easing cycle. The Fed hiked interest rates 4 times in 2018, but after a huge equity sell off and growth concerns (aided by a prolonged trade war with China) it has telegraphed to the market the need to add stimulus via lower rates.

The comments from Williams took markets by surprise as the central bank tried to temper expectations of a large rate cut, but the NY Fed chief came off as seeking a more aggressive response.

Gold remains bid as geopolitical risk events remain on the radar, but as the Fed walked back a deeper cut, the metal will remain sensitive to over performing US economic data.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stocks rise, Microsoft hits record high on earnings beat

Stocks rose on Friday as Wall Street cheered a strong quarterly report from Microsoft sent the stock to an all-time high.

The Dow Jones Industrial Average climbed 68 points, or 0.3%. The S&P 500 traded 0.2% higher. The Nasdaq Composite advanced 0.2%.

Microsoft shares rose 1.7% and hit a record after the tech giant posted quarterly earnings and revenue that topped analyst expectations. The company’s results were driven by a 39% year-over-year surge in cloud revenue.

“This quarter was an absolute ‘blow out quarter’ across the board with no blemishes and in our opinion speaks to an inflection point in deal flow as more enterprises pick Redmond for the cloud,” said Dan Ives, an analyst at Wedbush, in a note. “While the stock has been very strong and a trillion dollar market cap is now reached, we believe the cloud party is just getting started in Redmond as evidenced by the robust guidance MSFT provided.”

American Express, another Dow component, also reported better-than-expected earnings. However, the company’s stock dropped more than 2%.
CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏

Ed Moya

Ed Moya

US Stocks Rise After Fed Rate Cut Hope and Earnings Data

U.S. stock indexes advanced on Friday as solid results from Microsoft lifted technology stocks and added to an upbeat mood following signs from New York Fed President John Williams that the central bank would lower interest rates this month.

Microsoft Corp (MSFT.O), America’s most valuable company, gained 2.2% as strength in its cloud business helped it beat analysts’ estimates at the end of a week of mixed corporate results.

The S&P technology sector .SPLRCT gained 0.60%, providing the biggest boost to the benchmark S&P 500 .SPX index.

“Some optimism is being carried forward from New York Fed President John Williams’ comments and largely better-than-expected corporate earnings so far, highlighted by Microsoft,” said Art Hogan, chief market strategist at National Securities in New York.

Second-quarter profits at S&P 500 companies are now estimated to rise 1%, according to Refinitiv IBES data, in a reversal from earlier expectations of a small drop.

Williams’ remarks that the Fed cannot wait for economic disaster to unfold and must add stimulus early were behind Thursday’s positive close.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

US President Trump Keeps Adding Pressure to Fed to Lower Rates

OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. No: 0325821. Please refer to the NFA’s FOREX INVESTOR ALERT where appropriate.

OANDA (Canada) Corporation ULC accounts are available to anyone with a Canadian bank account. OANDA (Canada) Corporation ULC is regulated by the Investment Industry Regulatory Organization of Canada (IIROC), which includes IIROC’s online advisor check database (IIROC AdvisorReport), and customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.

OANDA Europe Limited is a company registered in England number 7110087 limited by shares with its registered office at Tower 42, Floor 9a, 25 Old Broad St, London EC2N 1HQ and is authorised and regulated by the Financial Conduct Authority, No: 542574.

OANDA Asia Pacific Pte Ltd (Co. Reg. No 200704926K) holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore and is also licenced by the International Enterprise Singapore.

OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and provides and is the issuer of the products and/or services on this website. It’s important for you to consider the current Financial Service Guide (FSG), Product Disclosure Statement (‘PDS’), Account Terms and any other relevant OANDA documents before making any financial investment decisions. These documents can be found here.

OANDA Japan Co., Ltd. First Type I Financial Instruments Business Director of the Kanto Local Financial Bureau (Kin-sho) No. 2137 Institute Financial Futures Association subscriber number 1571.

Americans’ Sentiment Firms on Best Financial View Since 2004

OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. No: 0325821. Please refer to the NFA’s FOREX INVESTOR ALERT where appropriate.

OANDA (Canada) Corporation ULC accounts are available to anyone with a Canadian bank account. OANDA (Canada) Corporation ULC is regulated by the Investment Industry Regulatory Organization of Canada (IIROC), which includes IIROC’s online advisor check database (IIROC AdvisorReport), and customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.

OANDA Europe Limited is a company registered in England number 7110087 limited by shares with its registered office at Tower 42, Floor 9a, 25 Old Broad St, London EC2N 1HQ and is authorised and regulated by the Financial Conduct Authority, No: 542574.

OANDA Asia Pacific Pte Ltd (Co. Reg. No 200704926K) holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore and is also licenced by the International Enterprise Singapore.

OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and provides and is the issuer of the products and/or services on this website. It’s important for you to consider the current Financial Service Guide (FSG), Product Disclosure Statement (‘PDS’), Account Terms and any other relevant OANDA documents before making any financial investment decisions. These documents can be found here.

OANDA Japan Co., Ltd. First Type I Financial Instruments Business Director of the Kanto Local Financial Bureau (Kin-sho) No. 2137 Institute Financial Futures Association subscriber number 1571.

US Open – Italian Elections, Canadian sales miss, Oil & Gold rise on downed drone and Bitcoin steadies

Next week tech earnings pick up speed and expectations are low for results for companies in the S&P 500.  Year-on-year growth is expected to decline 11.2%, quite the contrast to the financial, who reported this week and delivered earnings growth.  The trade war has weighed on tech stocks and multi-nationals, keeping investors nervous we could see drastic cuts in guidance next week.  After yesterday’s close, Microsoft delivered impressive earnings, which emphasized their success with their cloud strategy.  The tech-giant’s results have initially eased some concerns of the effects of the trade-related slowdown.

The key driver however for US stocks and the dollar remain the Fed.  Yesterday, NY Fed President John Williams noted that the Fed should be aggressive when confronting an adverse outlook.  Markets quickly increased the odds for a 50-basis rate cut at the end of the month.  A few hours later, a New York Fed spokesperson had to issue a correction and stated that Fed Williams’s speech was not about potential policy action but a reflection of research.  We are quickly approaching the blackout period and today we could get more clarity from two doves, Bullard and Rosengren. 

Italy/Euro

Euro weakness is stemming from a broadly stronger dollar and political concerns that Italy’s government could collapse.  Italy’s de facto leader Salvini signaled he won’t resign immediately.  Tensions are growing between the anti-establishment 5-Star movement and the far-right nationalist.  Fresh elections may not happen over the weekend, but they will most likely happen soon.  A steep decline with the German PPI report, the largest monthly slide since early 2016 did not help the euro. 

CAD

The Canadian dollar tumbled after Canadian retailers posted a surprising drop in sales in the month of May.  Consumers reduced expenditures on clothing, alcohol and food.  The Canadian dollar weakened over half a percentage point as markets have been used to a recent string of better than expected Canadian data.  Rate cut bets by the end of the year for the Bank of Canada also popped following the dismal sales reading, with markets now seeing a 60% chance, up from just under 50% before the release. 

Oil

President Trump stopped oil’s slide when he reported that the US downed an Iranian drone near the Strait of Hormuz.  Iran refuted Trumps comments and it seems markets got a good reminder that it will be unlikely to see an easy return to the negotiating table for Trump and the Iranians.  Crude prices have been weighed heavily on falling demand concerns and as production returns from both the Gulf of Mexico and the Russian contamination issue, but that could be short-lived once markets solely focus on the beginning of the Fed’s easing cycle. 

Oil could see major support from the Fed’s easing cycle, in 1995 oil prices doubled when the Fed lowered interest rates. 

Gold

Gold prices rallied after President Trump said the US downed an Iranian drone, bursting the bubble of optimistic banter that we could see Iran return to the negotiating table.  Gold is struggling to breakout from its pennant formation and could see some range trading until we get to the Fed’s rate decision at the end of the month. 

Bitcoin

Bitcoin pared yesterday’s gain after the G7 warned of serious risks that are coming from Libra and other digital coins.  Thursday saw a huge $1,000 spike that stemmed from short-seller profit taking.  Volatility will remain in place for Bitcoin, but we could see some stabilization for digital coins as the regulatory process will take years to take form.  Facebook’s grilling earlier in the week showed Congressional leaders don’t have the authority to regulate Libra like the Fed can with banks. 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏

Ed Moya

Ed Moya

Canada: Retail trade, May 2019

Retail sales declined for the first time in four months, edging down 0.1% to $51.5 billion in May. Excluding sales at motor vehicle and parts dealers and gasoline stations, retail sales decreased 1.0%.

Sales were down in 4 of 11 subsectors, representing 39% of retail trade. Lower sales at food and beverage stores were the main contributors to the decline.

After removing the effects of price changes, retail sales in volume terms decreased 0.5%.

Retail sales down in four subsectors

Receipts at food and beverage stores decreased 2.0% in May after increasing for three consecutive months. All store types within this subsector experienced lower sales this month, with the largest declines coming from supermarkets and other grocery stores (-2.0%) and beer, wine and liquor stores (-2.7%).

Sales at clothing and clothing accessories stores (-2.7%) and general merchandise stores (-1.1%) were down for the second month in a row.

For the fourth consecutive month, sales at gasoline stations (+3.5%) increased.

Sales at motor vehicle and parts dealers edged up 0.5% in May, as lower sales at new car dealers (-0.1%) were offset by an increase in sales at all other store types in this subsector.

Sales at cannabis stores (+14.8%) rose in May, surpassing $85 million. This increase marked the third consecutive month of double-digit growth. Gains were widespread across all provinces, with Quebec and Ontario accounting for the majority of the increase.

Sales decrease in eight provinces

For the first time in three months, sales in Alberta (-1.7%) were down, due to lower sales at motor vehicle and parts dealers.

In Nova Scotia (-2.3%) and Manitoba (-1.6%), retail sales decreased for the second time in the past three months. Declines were reported at motor vehicle and parts dealers.

Sales increased for the fourth consecutive month in Ontario (+0.5%), primarily as a result of higher sales at motor vehicle and parts dealers. In the CMA of Toronto, retail sales rose 0.3%.

Following a decrease in April, sales in Quebec were up 0.9% in May, largely on higher sales in the census metropolitan area (CMA) of Montréal (+1.8%).

E-commerce sales by Canadian retailers

The figures in the following sections are based on unadjusted (that is, not seasonally adjusted) estimates.

On an unadjusted basis, retail e-commerce sales were $1.8 billion in May, accounting for 3.0% of total retail trade, compared with 1.9% of total retail trade in May 2016—the year when official monthly statistics for retail e-commerce were first published. On a year-over-year basis, retail e-commerce increased 21.8%, while total unadjusted retail sales were up 1.6%.

StatsCanada

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

European update – Fed, USD, gold, oil, bitcoin

Markets buoyed by US rate cut hints

Stock markets are ending the week on a high and once again we have the Fed to thank for it.

Source – Thomson Reuters Eikon

Equities in the US enjoyed a nice rebound on Thursday when New York Fed President John Williams claimed that given the more limited resources at their disposal than in the past, preventative rate cuts would be more suitable than waiting for disaster, a clear nod to what we can expect at the upcoming meeting later this month.

Of course, a rate cut was already fully priced in but those comments – some of which were later shared by vice Chair Clarida – prompted a surge in the odds of a 50 basis point cut, to the point that it’s now viewed as a coin toss.

This further highlights that while the fundamentals are showing pockets of weakness, highlighted by a rocky start to earnings season, investors are becoming increasingly reliant on the Fed to keep the party going. While that shouldn’t be the Fed’s concern, the argument for preventative cuts is fair, although 50 basis points to get things going seems quite drastic when the economy is still very healthy.

Gold pares gains after surge on weaker dollar

As you’d expect, the comments reverberated around the rest of the market as well, with the dollar taking another tumble on the prospect of more aggressive easing than the Fed had previously signaled. This has brought some relief to some other currencies like the pound which has suffered in recent months. That said, sterling is back in the red today so the joy was short-lived.

Gold Daily Chart

OANDA fxTrade Advanced Charting Platform

Gold was given a strong boost by the news, surging beyond its recent peaks to break $1,450 although that little shot of adrenaline hasn’t been enough to sustain the rally, with the yellow metal trading back around $1,440. A more accommodative Fed is of course good for gold though so more joy may lie ahead.

Oil higher after US shoots down Iranian drone

It was a strange day for oil prices on Thursday and while they are trading higher today, they look like they don’t know what to do with themselves. The news of the US shooting down an Iranian drone may another time have caused prices to spike aggressively but instead traders took it in their stride. Perhaps this just isn’t enough of an escalation any more to spark traders interest, which would be a sign of how bad things have got.

Brent Daily Chart

Bitcoin pares gains after Thursday’s spike

Cryptos are unusually one of the more relaxed instruments on Friday, perhaps taking a well deserved break after weeks of chaos. Needless to say, they’ve spent plenty of time in the headlines recently and have been a hot topic in Washington. Bitcoin spiked yesterday on an apparent good news story for the space, with one lawmaker claiming it can’t be killed. This is hardly worthy of a 10% turnaround but after a period of such negative attention, perhaps it was just the kind of headline enthusiasts were craving.

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.