The US dollar is strengthening against major currencies. The dollar currency rose to a two-week high on Wednesday, supported by a rise in US Treasury yields as investors questioned market expectations of six rate cut in 2024. But ended the day well off the session high after the Fed minutes triggered a pullback in yields. The dollar index traded at 102.457, up 1.10%, the biggest one-day gain since march 30 November 2023.
Minutes of the December 12-13 Federal Reserve meeting released on Wednesday showed officials were convinced inflation was coming under control and were concerned about the damage that “overly restrictive” monetary policy might do to the economy.
The price of crude oil survived an intraday loss of more than one percent. The first trade of 2024 was negative as expectations of a cut in interest rates faded and there were worries that tensions in the Red Sea could disrupt supplies. Prices fell as investors cut expectations for a tax cut in 2024.
Lower interest rates reduce borrowing costs for consumers, which can boost economic growth and demand for oil. Gold fell sharply, giving up some recent gains, as the dollar bounced back from uncertainty over the Federal Reserve’s 2024 rate cut schedule.
Copper gave up some of its gains on weak economic data from top importer China. Weakness in China has been the main point of contention in the copper market as the post-Covid economic recovery falters in 2023.
MCX gold futures down 1.19% to 62507. Silver fell 2.38% to 72333. Copper fell 0.31% to 727.60. Crude oil 6071, up 2.15%. Natural gas gain 4.99% to 223.10.
Now the German inflation data and the US unemployment data is crucial for the day’s trade.
Economic data and events scheduled today – Will German inflation take over or will US unemployment data be the winner?
Eurozone
Time- Tentative – German Prelim CPI m/m. Data is foreseen at 0.2% from previous -0.4%.
At 1.15pm- French Prelim CPI m/m. Data is foreseen at 0.2% from previous -0.2%.
At 1.45pm- Spanish Services PMI. Data is foreseen at 51.1 from previous 51.00.
At 2.15pm- Italian Services PMI. Data is foreseen at 49.8 from previous 49.5.
At 2.20pm- French Final Services PMI. Data is foreseen at 44.3 from previous 44.3.
At 2.25pm- German Final Services PMI. Data is foreseen at 48.4 from previous 48.4.
At 2.30pm- Final Services PMI. Data is foreseen at 48.1 from previous 48.10.
All above data could have a positive impact on the Euro.
UK
At 3.00pm-
Final Services PMI. Data is foreseen at 52.7 from previous 52.7.
M4 Money Supply m/m. Data is foreseen at 0.2% from previous 0.3%.
Mortgage Approvals. Data is foreseen at 48k from previous 47k.
Net Lending to Individuals m/m. Data is foreseen at 1.6B from previous 1.2B.
Above data could have a positive impact on the Pound.
US
At 6.45pm- ADP Non-Farm Employment Change. Data is foreseen at 120K from previous 103K.
At 7.00pm- Unemployment Claims. Data is foreseen at 217K from previous 218K.
At 8.15pm- Final Services PMI. Data is foreseen at 51.3 from previous 51.3.
At 9.00pm- Natural Gas Storage. Data is foreseen at -33B from previous -87B.
At 9.30pm- Crude Oil Inventories. Data is foreseen at -3.2M from previous -7.1M.
Above data could have a volatile impact on the dollar.
Commodity Samachar
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