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Russia’s sphere of influence is growing among developing countries, as Western nations fail to counter Kremlin’s moves in Ukraine, says a report by the Economist Intelligence Unit. The safe-haven US dollar rose lightly this morning.
Japan’s unemployment rate unexpectedly rose to 2.6% in February, versus market expectations of 2.4%, exerting pressure on the JPY/USD forex pair.
China’s official NBS non-manufacturing PMI surged to 58.2 in March, from 56.3 in the previous month. This being the strongest reading since May 2011 sent the CNY/USD pair higher in forex trading this morning.
Australia’s private sector credit rose by 0.3% in February, following a 0.4% increase in the prior month. The news lent support to the AUD/USD forex pair.
Colombia’s central bank raised its benchmark interest rate by 25bps to 13% at its latest meeting. The bank slowing its pace of tightening sent the COP/USD pair lower in forex trading this morning.
What’s happening: Gold prices recorded sharp gains on Thursday with traders assessing economic reports released by the US.
What happened: Gold climbed on Thursday, breaching the key resistance level of $2,000 during the session.
Weakness in the US dollar and volatility in equity markets lent support to the safe-haven yellow metal on Thursday.
Why it matters: Gold had been trading in a narrow range earlier in the week, with traders awaiting key economic reports.
Traders assessed economic reports released by the US on Thursday. The US reported GDP growth of 2.6% for the fourth quarter, versus expectations of 2.7%. Consumer spending increased 1%, versus the estimate of 1.4%.
The number of persons filing for jobless benefits increased by 7,000 to 198,000 in the latest week, higher than market estimates of 196,000.
The US dollar moved lower on Thursday. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.5% to 102.14. Weakness in the US dollar generally provides support to commodities and metals, which are quoted in USD and become less expensive for foreign currency holders.
Volatility in the equity markets also lend some support to the yellow metal. Gold-related stocks, including those of Gold Fields, Galiano Gold and Avino Silver & Gold Mines., climbed amid strength in gold prices.
Gold for June delivery gained $13.20 to settle at $1,997.70 an ounce on Thursday, after hitting $2,000 an ounce earlier in the session. Silver for May delivery added 52 cents to $23.99 an ounce.
May copper remained broadly flat at $4.09 a pound, while platinum rose to $996.9 and palladium settled higher at $1,463.60.
What to watch: Traders will keep an eye on the US Fed’s monetary policy moves, with expectations of the central bank keeping rates unchanged at its May meeting.
Markets also await the Federal Reserve’s preferred measure of inflation, the core PCE (personal consumption expenditures) index, scheduled for release today.
Context: The CAD/USD forex pair recorded gains on Thursday, climbing to a one-month high.
Details: Most equity markets ended in the green on Thursday, with the safe-haven US dollar losing its appeal, as traders shifted their focus to inflation data to get some more insights into the Fed’s upcoming rate moves.
A rise in the price of crude oil, one of Canada’s major exports, lent further support to the loonie on Thursday. WTI crude oil prices gained around 1.9% to close at $74.37 per barrel.
Crude oil rose after the EIA (Energy Information Administration) said US stockpiles fell by 7.489 million barrels in the week ended March 24, versus market expectations of a gain of 0.092 million barrels, according to the.
On the economic data front, average weekly earnings of non-farm payroll employees in Canada climbed 2.9% year-over-year to $1,185.39 in January, after rising 2.6% in the previous month. Canada’s CFIB Business Barometer long-term optimism index climbed to a nine-month high of 55.3 for March, versus 51.8 in the previous month.
The CAD/USD forex pair added around 0.3% to reach $1.3524 on Thursday. The S&P/TSX Composite index rose 0.52% to close at 19,940.99, recording gains for the fifth session.
What are expectations: Traders await the release of GDP data from Canada today. The Canadian economy is expected to expand by 0.3% in January, following a 0.1% decline in December.
Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.74%, 1.26%, 1.06% and 1.03%, respectively.
| Technical Levels | News Sentiment |
| EUR/USD – 1.0902 and 1.0921 | Negative |
| GBP/USD – 1.2395 and 1.2417 | Positive |
| Nasdaq 100 – 12953.05 and 12969.48 | Negative |
| DAX 40 – 15522.90 and 15540.40 | Negative |
| WTI Crude Oil – 74.41 and 74.61 | Positive |
| Futures at 0400 (GMT) | ||
| EUR/USD (1.0912, 0.06%) | Dow ($33,101, 0.17%) | Brent ($78.65, 0.1%) |
| GBP/USD (1.2400, 0.11%) | S&P500 ($4,092, 0.28%) | WTI ($74.48, 0.2%) |
| USD/JPY (133.06, 0.25%) | Nasdaq ($13,127, 0.34%) | Gold ($1,999, 0.1%) |
Germany’s retail sales, import prices, number of unemployed persons, unemployment change, and unemployment rate, Italy’s industry sales and inflation rate, Spain’s current account, UK’s current account, GDP growth rate, Nationwide house price index and business investment, France’s inflation rate, household spending and producer prices, India’s total external debt, foreign exchange reserves, infrastructure output, current account and central government budget value, Turkey’s balance of trade, Eurozone’s consumer price inflation and unemployment rate, Mexico’s government budget value and unemployment rate, Brazil’s government budget value and unemployment rate, South Africa’s balance of trade, US personal income, personal spending, Chicago PMI, University of Michigan consumer sentiment, and Baker Hughes crude oil rigs, Russia’s money supply M2, as well as China’s current account.
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