The dollar gave up some earlier gains and slipped again after the Euro hit a 15-year high. The dollar also fell to a five-week low against a basket of other currencies as a result of U.S. figures showing that retail sales unexpectedly increased in May and higher-than-expected unemployment claims last week.
After rising by 0.4% in April, U.S. retail sales unexpectedly increased by 0.3% in May. Reuters polled economists, who predicted a 0.1% decline in sales.
For the week ending June 10, new claims for state unemployment benefits in the United States remained constant at 262,000 (seasonally adjusted).
The European Central Bank increased interest rates and hinted at additional tightening on Thursday to drive eurozone inflation to its medium-term target of 2%. As a result, the euro touched a 15-year high versus the yen and a fresh four-week high against the dollar.
As anticipated, the European Central Bank increased interest rates for the eighth time in a row on Thursday and hinted at additional policy tightening to combat excessive inflation.
ECB lifted rates by 25 basis points, as expected, its eighth successive increase, to 3.5%, the highest in 22 years.
ECB President Lagarde left the door open to additional hikes in the future during her press conference following the decision, stating that the labour market was “on fire,” that inflation would likely remain sticky for some time, and that the ECB still had work to do.
Gold prices recovered from the day’s low of 58661 and settled at 59355, up 0.10%. Silver prices recovered from the day’s low of 70715 and settled at 72126, down 0.72%.
Today, Gold futures having immediate resistance are seen at 59520-59850.00. Support at 58900-58650.
Silver Future has resistance at 72850-73320 and support at 71200-70500.00.
Base metals extended their bullish move and settled in a green. Copper futures settled at 735.25, up 0.46%. Zinc prices are up by 0.57% at 222.20 Aluminum prices are down by 0.15% and Lead trade is up by 0.38%.
Technical Levels – Copper prices now have immediate resistance at 738.50 above it at 745-749. On the downside, support is seen at 732.50-725.5.
As the U.S. dollar dropped and statistics revealed an increase in refinery runs in China, the world’s largest crude importer, crude oil prices rose by almost 3% to a one-week high on Thursday.
U.S. West Texas Intermediate (WTI) crude increased $2.00, or 2.9%, to $70.27 while Brent futures increased $2.07, or 2.8%, to $75.27 per barrel.
Technical Levels – Crude oil having immediate resistance 5845-5965. On the downside, crucial support is seen at 5605-5530.00.
Economic data and events to watch
Japan
Tentative – Monetary Policy Statement and BOJ Policy Rate Decision.
The central bank expected to maintain its ultra-loose monetary policy at -0.10%, unchanged as it moves to support local growth.
Above data could have a volatile impact on Yen.
U.K.
At 2.00 pm – Consumer Inflation Expectations. Previous was at 3.9%.
All the above data expect to have a neutral impact on the pound.
Eurozone
At 12.30 pm- German Buba President Nagel Speaks is to be released. Data is expected to come at -0.1%, from the previous -0.1%.
At 2.30 pm – Final CPI y/y. Data is foreseen at 6.1%, unchanged from the previous.
Final Core CPI y/y. Data is foreseen at 5.3%, unchanged from the previous.
Italian Trade Balance. Data is foreseen at 3.29B, lower than the previous 7.54B.
Tentative -ECOFIN Meetings
At 5.45 pm – Monetary Policy Statement and Main Refinancing Rate. Expect to hike by 4.0% from the 3.75% previous policy.
At 6.15 pm – ECB Press Conference.
Both the above data could have a positive impact on the Euro.
Canada
At 6.00 pm – Foreign Securities Purchases. The previous was at -19.07B
Wholesale Sales m/m. Data is foreseen contraction of 1.4% against previous 46.0%
Both data could have a negative impact on USDCAD.
U.S.
At 5.15 pm – FOMC Member Waller Speaks
At 6.00 pm – Prelim UoM Consumer Sentiment is to be released with a forecast to come at 60.1, slightly higher than the previous 59.2.
Prelim UoM Inflation Expectations, previous was at 4.2%.
Retail Sales m/m. Expect to contract by 0.2% against 0.4%.
Tentative – Fed Monetary Policy
All above numbers will have a volatile impact on the dollar