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MTrading Team • 2022-05-25

US Dollar, oil rise amid mixed flows, gold, cryptos trade mixed, FOMC Minutes eyed

US Dollar, oil rise amid mixed flows, gold, cryptos trade mixed, FOMC Minutes eyed

Fears of growth underpinned the US dollar’s corrective pullback from a monthly low. However, geopolitical concerns and sluggish yields allow Antipodeans to withstand the blow. 

Gold prices also managed to print mild gains while Brent oil rises for the fifth consecutive day to refresh the weekly top as supply crunch woes joined inflation chatters.

NZDUSD cheered the RBNZ rate hike and lead the G10 currency pairs while AUDUSD struggled for clear directions amid a mixed mood.

BTCUSD and ETHUSD dwindle as ECB warned about the correlation between equities and cryptocurrencies.

Following is the list of major assets’ latest performances:

  • Brent oil rises for the fifth consecutive day, up 0.91% to around $114.80.
  • Gold snaps five-day uptrend, reversing from a fortnight high to $1,857 at the latest.
  • USD Index bounces off one-month low, up 0.40% intraday near 102.70 by the press time.
  • FTSE 100 and EUROSTOXX50 both print mild gains but DAX remains indecisive of late.
  • Dow Jones rose 0.15% but S&P 500 lost 0.81% while Nasdaq slumped 2.35% amid a mixed US session on Tuesday.
  • BTCUSD remains below $30,000, printing mild gains, whereas ETHUSD drops 0.30% to $1,970.
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Growth, inflation and central bankers confuse traders

Slowing housing sales in the US join mixed comments from the Fed policymakers to renew pessimism surrounding the global economic outlook, which in turn favors the US dollar’s safe-haven demand. The greenback got additional support from a pause on the US Treasury yields’ south-run at the monthly bottom, as well as the market’s anxiety ahead of FOMC Minutes.

Also challenging the market sentiment were the fresh chatters over China’s military drill near the border of Taiwan and North Korea’s missile launches. 

However, decision-makers from Eurozone seem cautiously optimistic and helped the regional currency to remain firmer for a week, despite the latest pullback.

Elsewhere, a surprise build in the US weekly API inventories couldn’t derail the Brent oil’s recovery moves, backed by hopes of further disturbances to the global supply chain and oil flow. Even so, covid fears in China and the RBNZ’s another 50 bps rate hike challenges the commodities.

Cryptocurrencies managed to keep the latest rebound as Ether’s Merge is approaching faster and institutional investors keep pushing money into Bitcoin despite recently lackluster moves.

⏫ 🟢 Strong buy: AUDUSD, NZDUSD

⏬ 🔴 Strong sell: Nasdaq, silver

⬆️ 🟢 Buy: USD Index, USDJPY

⬇️ 🔴 Sell: DAX, FTSE 100, brent oil, gold, ETHUSD, BTCUSD, gold

FOMC Minutes, ECB’s Lagarde and some US data ahead

After a mixed start of the day, which helped the US dollar to rebound, markets are likely to witness volatile sessions ahead as multiple top-tier data/events are up publishing.

Among them, minutes of the latest Fed minutes and a speech from ECB President Christine Lagarde will be crucial to watch. Also important will be April’s US Durable Goods Orders, especially after the latest disappointments from the US data.

It should be noted that the Sino-American jitters and fresh fears from North Korea propel the flight to safety but the repetitive Fedspeak is something the USD traders are tired of hearing.

To sum up, global markets are likely to witness darker days ahead but there is no guarantee that the US dollar will benefit from the same.

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