What you need to know on Monday, June 27:
The dollar advanced on Friday on the back of higher US PCE inflation, which rose in May 3.4% YoY, its highest reading in almost three decades. Gains however were modest and the dollar ended the week with modest losses.
US stocks soared, with the Nasdaq and the S&P reaching fresh all-time highs, holding on to gains despite higher government bond yields, following higher US inflation figures.
The EUR/USD pair kept trading within familiar levels, ending the week at around 1.1930. The pound remained under selling pressure, undermined by the BOE’s dovish announcement. GBP/USD settled at 1.3870. The Australian dollar lost ground against its American rival ahead of the weekly close, although the Canadian dollar remained strong.
Gold finished the week little changed around $1,780 a troy ounce. Crude oil prices advanced, with WTI up to $74.00 a barrel.
UK Health Minister Mark Hancock resigned on Saturday after breaking coronavirus-related rules imposed by himself. The news may impact the already weak Sterling at the weekly opening.
The week will start in slow motion from the fundamental side, with the focus on US employment numbers to be out by the end of the week.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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