Long bets on yuan near six-month high; ringgit bears firm: Reuters poll

from Forex News https://www.investing.com/news/stock-market-news/long-bets-on-yuan-near-sixmonth-high-ringgit-bears-firm-reuters-poll-2522026
via IFTTT

Dollar Edges Higher; Key Employment Data Looms Large

from Forex News https://www.investing.com/news/forex-news/dollar-edges-higher-key-employment-data-looms-large-2522070
via IFTTT

Dollar Up, China’s Services Sector Grows at Slower Pace in May

from Forex News https://www.investing.com/news/forex-news/dollar-up-chinas-services-sector-grows-at-slower-pace-in-may-2522071
via IFTTT

Dollar on tenterhooks as payrolls test looms

from Forex News https://www.investing.com/news/economy/dollar-on-tenterhooks-as-payrolls-test-looms-2521984
via IFTTT

Dogecoin has shot up in value again today – what’s going on this time?

Dogecoin, a cryptocurrency that started as a joke and which also happens to be one of Elon Musk’s favourites, shot up on Wednesday.

At the time of writing, it is up around 30%, sitting at around $0.408. 

It’s not the first time dogecoin has jumped this year. The meme cryptocurrency has been on a tear and is up by around 9,000% since the start of the year alone. 

So what’s going? 

It seems that the culprit for once is not a Musk tweet (well, not just a Musk tweet), but the imminent listing of dogecoin on the Coinbase Pro exchange. 

Dogecoin was already listed on Coinbase. But the pro listing paves the way for traders to buy dogecoin on America’s largest cryptocurrency exchange from 3 June if “liquidity conditions are met”, the exchange said. 

Coinbase, America’s largest cryptocurrency exchange, went public in April and is split into two parts. Coinbase acts as a cryptocurrency wallet and brokerage service, while Coinbase Pro is an exchange for advanced users which enables them to buy and sell cryptocurrencies across trading pairs (in other words you can play the bitcoin/ether exchange rate, say), and also gives them access to many other types of cryptocurrencies. 

Elon Musk – the Jerome Powell of crypto?

Musk of course took to Twitter to celebrate the news of doge being added to Coinbase Pro and retweeted a picture showing dogecoin taking over the global financial system, later adding the word “inevitable.” 

Dogecoin was created in 2013 by software engineers Jackson Palmer and Billy Markus. It is based on the popular internet “meme” of a Japanese type of dog, the Shiba Inu. 

While it started out as a joke, the cryptocurrency currently has a higher value than many other relatively “stronger” cryptocurrency projects. At the time of writing, dogecoin’s total value is just shy of $55bn, according to CoinMarketCap. 

Dogecoin is not alone. Wednesday’s bullish optimism for the dogecoin spread to other cryptocurrencies. Ether, the world’s second largest cryptocurrency by value after bitcoin, rose 7%, meanwhile bitcoin was up 3% and cardano rose 4%.  

However, doge is still trading well below its all-time high of $0.68 it traded at in May. And investors can be forgiven for taking any of Musk’s comments with a pinch of salt, especially given the Tesla chief executive’s recent U-turn on the idea of accepting bitcoin as payment for Teslas, despite buying around $1.5bn worth of bitcoin earlier in the year. 

Musk has started to gain a reputation as the “Fed of the crypto world”. But the fact that the cryptocurrency market can so easily be moved by Tweets from a single (and somewhat capricious) CEO really just shows how volatile the market itself is. 

In the case of dogecoin in particular, it’s hard to work out what the appeal is. There’s the fact that it was founded as a joke, for a start, and that unlike bitcoin, it technically has an unlimited supply. 

As the project’s co-founder Markus said earlier in the year, if anything, the cryptocurrency’s gains are a good “barometer” for how disconnected the cryptocurrency is from reality. 

from Moneyweek RSS Feed https://moneyweek.com/investments/alternative-finance/bitcoin-crypto/603332/dogecoin-has-shot-up-in-value-again-today
via IFTTT

Midweek Market Podcast – June 2

The USD moved higher from a test of 2021 lows, equity markets continued to recover, Gold and Oil market remained biased higher as economic data remained broadly positive, all ahead of NFP Jobs Day on Friday.

HotForex · Midweek Market Podcast – June 2 2021

The Market Week – June – Week 1   

The start of the new month and the trends continue: the Dollar remains weighed but recovers from lows, Commodities dip as USD picks up and Equities continue to recover. Data this week has been solid with PCE, PMIs and CPI all broadly positive so far. Jobs dominate, with ADP, Weekly Claims and the key NFP data still to come.

Unemployment remains very much in focus. The weekly US unemployment claims are trending lower, and last week’s 406,000 was another new pandemic era low, with 400,000 expected this week.   The ADP data is expected around 645,000, the unemployment rate is expected to move lower to 5.9% and the headline NFP number is expected at 664,000.

The vaccine rollouts continue to drive sentiment, but the virus variants remain significant. The US and UK continue to lead the vaccine rollouts, however the situation in India remains very significant and new lockdowns have been implemented in countries from Malaysia to Australia.

This week FX volatility continued as the USD moved up from a test of 2021 lows last week. The USDIndex is struggling to break over 90.00 but is up from 89.50 lows. EURUSD dipped to 1.2130, rallied to 1.2250 and rotates around 1.2200, USDJPY broke over 109.00 and even breached 110.00, but 109.00 remains key, and Cable rallied to as high as 1.4245 and a new 3-year high but could not hold 1.4200, with 1.4100 remaining key.

Global stock markets recovered from the inflation fears spike lower and consolidated. The rotation from tech stocks to cyclicals was clearly demonstrated during May as the USA100 lost 1.53%, whilst the USA30 gained 1.94%. The USA500 holds over 4,200 this week ahead of NFP.

The Gold price continued to rally this week, peaking over $1916. The technical $1875 is key support and $1925 the key resistance area. Psychologically, $1900 is key. The wider commodity rally continues, although it has been more volatile this week with large moves for Silver and Copper.

USOil prices rallied to October 2018 highs at $68.60 this week ahead of the OPEC+ meeting, which agreed to maintain production quotas (maintaining supply at sub-capacity levels), despite improving global demand projections. The worry over possible new Iranian oil supplies is diminishing for now.

The yield on the US 10-Year Treasury Note still holds above the psychological 1.50% level and is back over the key support of 1.60%, trading at 1.62% this week, down from last month’s high test of 1.70%.

Click here to access our Economic Calendar

Stuart Cowell 

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /241655/
via IFTTT

Loonie ahead of a potentially bitter Canadian data

Global recovery expectations continue to firm while inflation worries have abated, for now. The employment reports are the hot topic of the week, since after encouraging employment in the Eurozone and Germany, next on tap are US Non-Farm payrolls and the Canadian employment release. The latter however is expected to disappoint for May as the unemployment change is expected to increase. Canadian employment is projected to post a -40.0k drop for April amid increased restrictions as infections ramped higher, while the unemployment rate should come in at 8.2%.

In April, Canada employment fell -207.1k after the 303.1k surge in March, leaving a decline that was a bit stronger than expected but well within the large forecast range for this release. Full time employment declined -129.4k after the 175.4k gain while part time positions shrunk -77.8k following the 127.8k rise in March. The unemployment rate rose to 8.1% from 7.5%. The participation rate eased to 64.9% from 65.2%. The average hourly wage rate of permanent employees fell -1.6% y/y after a 2.0% gain in March, with the annual decline during April driven by a difficult comparison (April of 2020 saw an all-time high growth rate of 10.5%).

The report revealed the roughly as-expected contraction in the labour market amid increased restrictions (Ontario was shut down, other regions were impacted) that came alongside a jump in infections during the month. Even though the base case remains for a return to labour market growth this is expected to be seen later this year as vaccinations take hold and restrictions are eased.

The Canadian Dollar has been experiencing and is expected to continue experiencing an overall bullish movement for more than a year now as the country vaccinated more than 50% of the population in 5 months, reaching the government’s goals, even though its vaccine roll out lags the US and UK. The Canadian economy is recovering fast, as  housing investment continued to grow at a strong pace, supported by very favorable financing conditions and the recovery in the job market. Meanwhile the sizable pop in the latest CPI – which was close to what was expected by analysts and the BoC – increased worries that the BoC and other major central banks will have to trim emergency measures sooner than had previously been expected, which weighed on stocks globally, and that spilled over to Canada’s equity market. The BoC will probably raise its current key interest rate of 0.25% in late 2022 and this will result in a stronger Loonie.

Nonetheless, the BoC is likely to look through the slump/limited growth in Q2 as vaccinations have ramped up and restrictions returned in April and May, consistent with a resumption of the recovery in the second half of this year.

However the last couple of days the Canadian Dollar has been seen settling lower ahead of Friday’s releases from the US and Canada. USDCAD is modestly higher today, at the 1.2070-1.2080 area after printing a 6-year low at 1.2005 yesterday. At the same time, the CADJPY cross, which we have been bullish on for nearly a year as well, has settled slightly lower after hitting a new 41-month high. 

If on Friday, the Canadian labor report misses forecasts and presents low jobs growth and a rising unemployment rate, then this could weigh on the Canadian Dollar, and  USDCAD could be seen extending higher. Immediate Resistance levels fall at the 20-DMA and 12-day high, at 1.2093 and 1.2145 respectively. Further buying pressure above this level could lift the asset to 50-DMA at 1.2280.

On the contrary, an encouraging jobs report could benefit Loonie against Greenback, and could drive  USDCAD to the 1.2000 psychological level which provides initial support, though sell-stops are reported parked under the figure. A break there would bring the May 2015 low of 1.1920 and 2013 highs into view.

Firmer commodity and oil prices should continue as the global recovery continues, which along with massive global stimulus , the success of Covid vaccinations and ramping-up global supply capacity for vaccine production should keep the global reflation trade on track into 2022 and should keep the CAD on a firmer footing.

Click here to access our Economic Calendar

Andria Pichidi 

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /241372/
via IFTTT

Lira Traders Say ‘We’ve Been Here Before’ in Turkey Rates Replay

from Forex News https://www.investing.com/news/forex-news/lira-traders-say-weve-been-here-before-in-turkey-rates-replay-2521023
via IFTTT

Market Spotlight: CADJPY Fresh Levels

CADJPY Rally ContinuesFollowing the brief consolidation around the bull channel top, price has since broken out above the 90.69 level and is sitting atop the channel also. While above here, the focus is on a further push higher towards the 91.60 level next. MACD and RSI are both showing bearish divergence here, however, so be aware for any dip below the 90.69 level. Below there, 89.24 is the next support to note. With oil prices moving higher here and equities remaining supported, there is still room for CAD to move higher here while JPY should remain weak due to reduced safe haven inflows.Key Data to Watch The next key release to keep an eye on is Canadian employment data on Friday. The market is looking for the unemployment rate to move up slightly to 8.2% from the prior month’s 8.1% reading. If the rate does increase, this could stifle any further upside in the short term. Alternatively, a strong reading should act as a driver for fresh gains.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-cadjpy-fresh-levels"
via IFTTT

Market Spotlight: Which Way Next for GBPUSD?

GBPUSD At Key ResistanceThe rally in GBPUSD has seen price trading all the way back up to retest the 2021 highs around 1.4248. For now, this level is holding as resistance, helped by the broken bull channel low which has also helped cap the move. With plenty of bearish divergence in the RSI and MACD indicators there is room for a deeper correction here towards the 1.3997 level.In terms of the fundamental backdrop, the UK environment is improving rapidly. The government’s success in its vaccination program and the success so far with sticking to its reopening schedule have allowed the economy to rebound sharply. However, doubts are creeping in ahead of the final date, June 21st. A rise in the number of cases of the variant first found in India has created some concern over whether the government will delay full reopening if cases continue to rise. This uncertainty is reflected in the current consolidation we’re seeing. The government is due to make a decision by June 21st and the outcomes are clear; stick to the plan, GBP goes higher, delay reopening, GBP goes lower.Key Data to Watch On the US side of the coin we have some big releases this week which could cause Dollar volatility. The labour reports on Friday will be a big market focus and should the data come in stronger than expected, this is likely to bring Fed tapering back into focus, sending USD higher.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-which-way-next-for-gbpusd"
via IFTTT

Regulators insist derivatives industry must ditch Libor

from Forex News https://www.investing.com/news/forex-news/regulators-insist-derivatives-industry-must-ditch-libor-2520988
via IFTTT

Everything hinges on the direction of the US dollar right now

We are at a huge inflection point for the US dollar, right here and now.

It’s one of those “does it go higher or lower?” moments. 

The ramifications are considerable – for most things, but especially gold and silver...

Gold has had a rather pleasant spring

Gold has quietly had an extremely good spring.

Coming off a textbook “W bottom” in March at $1,675 per ounce, it has marched over $200 higher through April and May, reaching $1,920 yesterday, where it has inevitably stumbled.

Why do I say inevitably? Because $1,920 was the price it reached in 2011 after ten years of bull market, one of the most epic bull markets in gold’s history. It’s a high that stood for nine years, until it was eventually – though only briefly – overcome last year. 

It’s such an obvious and long-term price point that gold was bound to at least stutter there, as it did yesterday.

Gold looks very good, it has to be said. It’s grinding upwards. All the moving averages – short, intermediate and long-term are sloping upwards. We have a nice trend – and you know what I think about trends.

Silver too is looking very good, and it’s not often you hear me saying that. Currently at $28 an ounce, if it can get above $30 then a run to $50 looks like it’s on the cards. 

Even the ratio of gold-to-bitcoin is looking good (as far as the old money advocates are concerned), turning up after forming what looks like a long-term low over the spring.

That would be part of this rotation we have been observing – from digital into physical, from growth into value, from new economy to old, from tech to commodities. 

I view, as regular readers will know, the incredible growth seen in tech stocks since the 1980s as a function of the vast scalability of digital tech. One upload to Spotify or iTunes is, effectively, the same as getting a million or a billion vinyl records pressed in the 1970s. 

Money has poured into tech because of the quick returns it offers. And for the most part, as a result, tech has outperformed.

Yet within that broader trend there have been windows when the physical economy has shone more brightly. The ‘80s and ‘90s were all about tech, but then between 2000 and 2003 “physical” outperformed. 

The rest of the ‘00s saw roughly equal performance, then in 2009 tech began to outperform again and that remained the case for over 10 years.

Now, however, ‘physical’ seems to be entering into one of its rare periods of outperformance, probably at least in part as a result of 10 years of underinvestment.

Gold’s recent outperformance, especially versus bitcoin, would be a part of that recent rotation. So would the recent rallies in commodities. 

Tech will win in the end. Its scalability is just astonishing. But that doesn’t mean physical can’t have a couple of years in the investment sun.

What will it be: the revenge of the real? Or the triumph of tech?

But real investment life is never as straightforward as articles about it might make it seem. The big potential fly in the ointment of this theory is the US dollar. 

We can explain recent investment trends as a “great rotation” from tech to physical or some such. But really, much of it has just been a function of the US dollar – which is still the single most important price in the world – having had a rotten couple of months, and a rotten last three quarters in 2020. The US dollar index (which measures the value of the US dollar versus the currencies of its major trading partners) peaked at 103 at the height of the Corona Panic in March 2020. This was the same peak it hit in 2017 at the end of Barack Obama’s presidency and at the beginning of Trump’s. 

We got a huge, multi-year “double top” – an “M” – and since then it’s been in freefall, ending 2020 at 89.

We had a relief rally to 93 which lasted up until March. Since then, it’s been in freefall again. Now we are back at 89, retesting the lows. These are the same lows which held in early 2018, and from which a huge relief rally followed – a two-year bull market in the US dollar.

Here’s a five-year chart.

StockCharts.com

The fate of the US dollar at 88-89, the level it is currently re-testing (that thick red line), determines the entire investment outlook for the next two years.

If 88-89 holds, then it might be time to discard the “Great Rotation” theory. The secular bull market we appear to be at the beginning of in commodities may be off as well. 

If we fall below that level, however, the party’s on. Buy metals – base and precious – buy oil, buy the pound even. They’ll all go higher, a lot higher. Inflation, inflation, inflation.

What do you think? Does 88-9 hold? Do we rebound here? 

Perhaps we pause for breath here, and then head lower?

Or perhaps it gives way straight away?

Bottom line: it’s a trend, and the current direction is down.

Daylight Robbery – How Tax Shaped The Past And Will Change The Future is now out in paperback at Amazon and all good bookstores with the audiobook, read by Dominic, on Audible and elsewhere.

from Moneyweek RSS Feed https://moneyweek.com/investments/commodities/gold/603331/everything-hinges-on-the-direction-of-the-us-dollar-right-now
via IFTTT

Aussie GDP Higher Than Pre-Pandemic

GDP Rises in Q1 Aussie bulls were given further encouragement overnight as the latest economic data came in above expectations. Aussie Q1 GDP came in at 1.8%, well above the 1.6% forecast. With this latest increase, annual GDP is now at 1.1% and sitting 0.8% higher than the previous (pre-pandemic) peak.More Evenly Split Recovery Looking at the breakdown of the data provided by the ABS, there were further encouraging signs. The main positive contributions came from private investment ( +0.9%) and household consumption (+0.7%). This shows that recovery is becoming more evenly split, which will certainly be good news for the RBA given its concern over an uneven recovery so far.Looking at the data further, within the private investment figure, the increase was predominantly driven by an uptick in business machinery and equipment purchases, which both increased by 11.6%. This was the largest rise in both sections since December 2009. Housing investment also saw an impressive 6.4% increase, helped hugely by government subsidies such as the HomeBuilder scheme and the temporary full expensing of business investment.Services Sector Jumps The better performance in the services sector has also been highly encouraging. Looking at the breakdown of rise in services pending, the main lift came from hotels, cafes and restaurants, which saw a 14.8% rise in spending, while transport services also jumped by 8.8%. The ABS noted that "There has been a lift in domestic tourism as borders largely remained opened during the first quarter.” However, the increase in spending on eating out has come at a slight cost to grocery expenditure. The ABS noted that spending on goods dropped 0.5% in Q1, fuelled by declines in food and alcohol goods at -1.4% and -3.9% respectively.Lockdown Impact RisksHowever, despite a better than expected reading, there are still some risks within the Aussie outlook. Chief among these is the lockdown which has been underway in Victoria, the effects of which (present in the June quarter) won’t be seen until released in September. Any further outbreaks and additional lockdowns could also negatively impact the data, highlighting how severe the COVID threat remains.Technical Views ASX200The main Aussie stock index is breaking out to fresh, record highs today. Following the bounce off the 6916.6 level and rising channel low, the index has turned higher once again. While the MACD is bullish here, bearish divergence in the RSI index is worth noting. For now, the focus remains on further highs. Should we see any correction below 6916.6, 6657 is the next level to watch.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/aussie-gdp-higher-than-pre-pandemic"
via IFTTT

Mining rig maker Canaan argues against wholesale crackdown on bitcoin mining in China

from Forex News https://www.investing.com/news/forex-news/mining-rig-maker-canaan-argues-against-wholesale-crackdown-on-bitcoin-mining-in-china-2520896
via IFTTT