USD/JPY pushed through 122.00 on Thursday. Some retracement is seen today, though in the near-term, the focus will still be on USD/JPY upside as the pair pushes closer to mid-120s.
“Even as we are structurally positive on the USD/JPY towards the mid-120s, do not rule out technical pull-backs. The 121.00 locus may be the first support in that case.”
“For now, the BoJ and Fin Min have refrained from directly commenting on JPY weakness.”
The Russian rouble slid further on Thursday, hitting record lows against the dollar and euro, after ratings agencies Fitch and Moody's (NYSE:MCO) downgraded Russia's sovereign debt to "junk" status citing the impact of Western sanctions.
At 0830 GMT, the rouble was more than 10% weaker against the dollar at 117.5 and had lost over 7% against the euro to trade at 124.1 on the Moscow Exchange, marking the first time the rouble has traded above 110 to the dollar in Moscow.
The Russian central bank imposed a 30% commission on foreign currency purchases by individuals on currency exchanges - a move brokers said appeared designed to curb demand for dollars - but that did little to halt the rouble's slide.
Russia's financial markets have been thrown into turmoil by sanctions imposed over its invasion of Ukraine, the biggest attack on a European state since World War Two.
Russia calls its actions in Ukraine a "special operation" that it says is not designed to occupy territory but to destroy its southern neighbour's military capabilities and capture what it regards as dangerous nationalists.
Since Russian troops entered Ukraine on Feb. 24 the rouble is down close to 30% against the dollar, and analysts said on Thursday it would probably remain highly volatile. The government has ordered Russian exporters to convert 80% of their forex revenues into roubles to support the local currency, but people are still queuing up at banks to buy dollars as the rouble slumps.
Trading on the Moscow Exchange's stock section remained largely closed on Thursday, a fourth day of restrictions ordered by the central bank.
Overnight, Fitch said that U.S. and European Union sanctions prohibiting any transactions with the Bank of Russia would have a "much larger impact on Russia's credit fundamentals than any previous sanctions". Moody's said the severity of the sanctions "have gone beyond Moody's initial expectations and will have material credit implications".
S&P lowered Russia's rating to sub-investment grade last week.
Russia's invasion of Ukraine and the sanctions imposed in response have led to dire warnings about the Russian economy, with the Institute of International Finance predicting a double-digit contraction in growth this year.
On Wednesday, index providers FTSE Russell and MSCI said they would remove Russian equities from all their indexes, after a top MSCI executive earlier this week called Russia's stock market "uninvestable".
MEW YORK (Reuters) - The U.S. dollar dipped on Friday, giving back some of the strong gains from the previous day, as investors gauged the latest round of sanctions on Russia and U.S. inflation data was seen as unlikely to make the Federal Reserve overly aggressive at its next policy meeting.
The greenback on Thursday notched its biggest one-day percentage gain since Nov. 10 to reach 97.74, its highest since June 30, 2020. However, it gave back some gains after U.S. President Joe Biden hit Russia with a wave of sanctions following that country's invasion of Ukraine, but refrained from imposing sanctions on Russian President Vladimir Putin and disconnecting Russia from the SWIFT international banking system.
U.S. economic data showed consumer spending increased more than expected in January even as price pressures mounted, with annual inflation hitting rates last seen four decades ago, although the personal consumption expenditures price index increased 0.6% in January after rising 0.5% in December.
"The revisions to income and spending data shows the economy was very resilient to Omicron and to high oil prices. Hopefully, the situation with Russia is short-lived, but even if oil prices stay elevated, the economy should have enough fundamental strength to tolerate high energy prices," said Brian Jacobsen, senior investment strategist at Allspring Global Investments in Menomonee Falls, Wisconsin.
"The inflation numbers weren’t great, but at least the month-on-month inflation numbers aren’t moving higher," Jacobsen said. "That should take some wind out from under the wings of the most hawkish Fed members."
The dollar index fell 0.459%, with the euro up 0.59% to $1.1257. The euro fell to $1.105 on Thursday, its weakest against the greenback since June 1, 2020.
Even with Friday's pullback, the dollar was still on track for a third straight week of gains.
The increased risk appetite was evident in the U.S. stock market, with the S&P 500 up more than 2% after staging a late session rally on Thursday.
Before Thursday's jump -- which sent the dollar to its highest level since June 30, 2020 -- the greenback had been subdued in recent weeks, as rising tensions in Ukraine fueled expectations the Fed may be less aggressive in tightening policy as it attempts to rein in inflation.
Expectations for at least a 50-basis-point interest rate hike at its March meeting have fallen to 25% from around 34% a day ago, according to CME's FedWatch Tool.
In the central bank's latest monetary policy report to Congress, the Fed warned inflation could last longer than anticipated should labor shortages and fast-rising wages continue.
The European Union is planning a third round of sanctions against Moscow, an EU official said on Friday, minutes after Ukraine's president pleaded with the bloc for faster, more forceful steps to punish Russia for its invasion of his country.
Policymakers at the European Central Bank (ECB) said the situation in Ukraine could cause the ECB to slow its exit from stimulus measures.
Investors see only a 4% chance the ECB will boost its benchmark interest rate by 10 basis points at its March 10 policy meeting. [IRPR]
The Russian rouble strengthened 1.67% versus the greenback to 83.04 per dollar after hitting hit a record low of 89.986 the day before.
The Japanese yen weakened 0.09% versus the greenback at 115.65 per dollar, while Sterling was last trading at $1.34, up 0.19% on the day.
In cryptocurrencies, bitcoin last rose 1.4% to $38,937.21.
Ethereum last rose 2.58% to $2,703.53.
- Western capitals have started putting in place fresh restrictions on Russia's sovereign debt as they seek to ratchet up pressure on Moscow over the conflict with Ukraine.
The United States and its allies introduced an initial round of sanctions after Russian President Vladimir Putin recognised two breakaway regions in eastern Ukraine on Monday. A string of harsher measures is expected after he launched a full-scale invasion on Thursday.
Access to Russian bonds had become increasingly restricted. U.S. sanctions imposed following the 2014 annexation of Crimea made future Russian dollar-denominated debt ineligible for many investors and key indexes.
In April 2021, U.S. President Joe Biden barred U.S. investors from buying new Russian rouble bonds over accusations of Moscow meddling in the U.S. election.
Here is an overview of what measures have already been added and what impact they might have:
WHAT ARE THE NEW RESTRICTIONS ON SOVEREIGN DEBT?
Washington announced a ban on U.S. entities participating in secondary markets for both rouble and non-rouble debt issued by Russia's central bank, the national wealth fund and the finance ministry after March 1.
The European Union agreed new sanctions that will target the ability of Moscow to access the bloc's capital and financial markets as well as services, and ban EU investors from trading in Russian state bonds. Canada's government said it would bar its citizens from engaging in purchases of Russia's sovereign debt.
Britain said on Wednesday it would stop Russia selling sovereign debt in London - one of the world's major financial centres for such transactions. The measures would require additional legislation, according to Western officials, and clearing transactions would also be affected. However, there was no indication on whether Britain would stop trade in outstanding sovereign debt.
The coordinated measures are aiming to curb Russia's ability to raise new foreign financing and plug some loopholes. Despite the limitations in the United States, Russia had been able to issue bonds in European markets.
Analysts at JPMorgan (NYSE:JPM) calculate that Russia has issued a combined 3.5 billion in euro-denominated bonds since 2020.
IMPLICATIONS FOR INVESTORS
Analysts see limited implications for holders of existing hard-currency bonds.
They, however, predicted the new U.S. sanctions on local sovereign bonds, so-called OFZs, would lead to the creation of two different classes of OFZs.
In response to the U.S. curbs on local sovereign bonds, the finance ministry said it would offer only new series of OFZs starting from Feb. 22 and stop tapping issues registered before this date "to lower risks of forced selling of circulating state securities by particular categories of foreign investors."
JPMorgan said that bonds which had been sold since mid-June had a 10-25 bps premium over existing issues, though this divergence faded, likely due to bonds being added to the most widely used emerging fixed income benchmark.
"However, premia may be more persistent this time given that new OFZs will not be index eligible," said Nicolaie Alexandru-Chidesciuc at JPMorgan. "As long as local banks can freely transact with foreigners the basis between the two curves should remain relatively narrow (within 20-30bp)."
WHAT DOES THIS MEAN FOR CAPITAL FLOWS?
Latest data shows that Russia has just under $40 billion in dollar and euro-denominated bonds outstanding, with just over half held by foreign investors. Positioning in those bonds by foreign investors looked light and the most underweight in two decades, according to a JPMorgan emerging market client survey.
Meanwhile foreign investors held around 18% or 2.8 trillion roubles ($34.4 billion) of overall outstanding OFZs, according to ING.
The new U.S. sanctions are not expected to trigger forced selling in OFZs. However, capital flows have shown investors ditched the bonds as tensions over Ukraine have escalated since late last year.
"Russia is now experiencing the fifth consecutive month of foreign portfolio outflows from OFZ," said Chris Turner, global head of markets at ING. "In October-January it totalled $5.4 billion, and since the beginning of February, some $1.1 billion were withdrawn."
Russia currently has a weight of 6.8% in JPMorgan's local sovereign debt benchmark, though given the U.S. measures would see no new issues added while existing ones would mature, the weighting was expected to shrink to below 5% in just over three years, the bank projected.
JPMorgan, which runs some of the most widely-used hard and local currency fixed income indexes in emerging markets, said on Wednesday it was reviewing the impact the new U.S. curbs may have on its emerging market benchmarks.
($1 = 81.3255 roubles)
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LONDON (Reuters) - The U.S. dollar treaded water on Thursday and the Japanese yen held on to its earlier gains after a Russian news report of mortar fire in eastern Ukraine jangled market nerves and boosted the appeal of safe haven bets.
Russia-backed rebels accused Ukrainian forces of shelling their territory in violation of agreements aimed at ending conflict in the contested Donbass area, the RIA news agency said, a report later denied by Ukraine.
While the greenback retreated from its Asian highs after the news broke, investors remained wary that Russia will invade the Ukraine again despite rising optimism at the start of this week that a diplomatic solution would be found to prevent conflict.
Against a basket of its rivals, the dollar steadied at 95.747 after rising above 96 in early Asian trading.
But in a sign that markets were not panicking yet, the rouble remained below a November 2020 high of 80 hit last month, while bond yields were only modestly higher.
"This strongly suggests that market participants remain optimistic overall that conflict will be avoided," MUFG strategists said in a client note.
The geopolitical news dwarfed the Fed's minutes of its January meeting, where policymakers agreed that it was time to tighten monetary policy but also that decisions would depend on a meeting-by-meeting analysis of data, according to minutes of the most recent policy meeting.
Short-dated U.S. Treasury yields fell and the yield curve steepened after the minutes as traders reassessed the probability of a 50 bps hike at the Fed's March meeting. Money markets were pricing in a 72% likelihood of a 50 bps hike next month compared to 80% at the start of the week.
The euro rebounded from earlier lows after falling as much as 0.4% after the Ukraine news. But Ukraine's denial and the location of the reported attack within already contested territory calmed things and the euro last sat at $1.1382.
The yen and the Swiss franc clung on to earlier gains, up 0.2% and 0.1% respectively versus the greenback.
(Reuters) -The dollar rose on Monday along with the yen and Swiss franc as investors rushed into safe-haven assets on fears that Russia is preparing to invade Ukraine.
Russia could make such a move at any time and might create a surprise pretext for an attack, according to the United States, which reaffirmed on Sunday a pledge to defend "every inch" The dollar index rose 0.4% to 96.328, its highest since Feb. 1.
of NATO territory. Moscow denied any such plans and has accused the West of
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Euro-dollar one-month implied volatility was at 7.6%, from below 6% at the end of January.
The rouble was 0.1% lower at 77.20 against the dollar, after tumbling to its lowest since January 28 on Friday as investors ditched Russian assets.
Commerzbank (DE:CBKG) analysts pointed out that “European dependency on Russian energy makes the cyclical economic performance of the euro zone particularly vulnerable in case of an escalation of the conflict in Ukraine.”
The euro was down 0.3% at $1.1318, after hitting its lowest level since Feb. 3 at $1.1305.
The euro weakened on Friday when a rush into safe-haven assets overshadowed expectations for monetary policy tightening from the European Central Bank.
ECB president Christine Lagarde had also dampened some of the bullish euro sentiment by reiterating that any policy action will be gradual.
The U.S. Federal Reserve will release its January meeting minutes on Wednesday, but analysts said central bank action was unlikely to return to the spotlight until the risk of an escalation over Ukraine recedes.
A rush into safe-haven assets has propped up the Japanese yen since Friday, while the Bank of Japan successfully defended its key bond yield target on Monday, holding the line on its ultra-loose monetary policy.
The yen rose 0.3% to 115.16 against the dollar, and 0.5% against the euro.
“These two currencies (the U.S. dollar and the yen) – as well as the Swiss franc – should remain bid until, and if, we get indications that a diplomatic solution is in sight,” ING analysts said, adding that “markets are adopting a wait-and-see approach on geopolitics at the start of the new week.”
We “flag quite significant downside risks for exposed currencies - directly the rouble and indirectly all pro-cyclical currencies and especially the European ones - should tension escalate further,” ING said.
The Swiss franc rose 0.4% against the euro to 1.0452, its highest since Feb. 3.
In cryptocurrencies, bitcoin was down 1% at around $42,116.
- In yesterday's trading session, Gold rose exactly as analyzed when it rose from 1824 to 1835 ($11) and closed the session with a bullish candle around 1833. However, the uptrend is dominant. dominant but in my personal opinion Gold will probably have a slight correction here.
- We can easily see that the precious metal Gold is at the resistance area around 1835, this is a relatively strong resistance area so it will not be suitable to establish a buy.on with Gold anymore. In my opinion here we can set up a small short position on this precious metal, target 1825-1820. When Gold reaches around the 1820 threshold, we will begin to consider the option to buy in with this precious metal.
The BOE raised rates by 25 basis points with dissenters in the 5-4 vote leaning to 50 bp rise. That initially sent the EURGBP to the downside.
However, after Lagarde started to switch course for the ECB, it was "fast break the other way" for the EURGBP with the price racing toward the high from last week.
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XAU/USD Price Forecast: Technical outlook
Gold is trading near the bottom of a Pitchfork’s channel, drawn from the beginning of December, as depicted by the daily chart. That trendline intersects with a downslope trendline, drawn from August 2020 swing highs, acting as resistance for the non-yielding metal around $1,790-$1,800. Furthermore, the daily moving averages (DMAs) reside above the spot price. Therefore, XAU/USD is downward biased.
The first support level would be December 15, 2021, swing low at $1,753. A breach of the latter would expose October 6, 2021, a daily low at $1746, followed by September 29, 2021, a low at $1,721
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Ethereum was trading at $2,838.02 by 06:34 (11:34 GMT) on the Index on Friday, down 10.02% on the day. It was the largest one-day percentage loss since November 26, 2021.
The move downwards pushed Ethereum's market cap down to $340.50B, or 18.63% of the total cryptocurrency market cap. At its highest, Ethereum's market cap was $569.58B.
Ethereum had traded in a range of $2,812.19 to $3,032.69 in the previous twenty-four hours.
Over the past seven days, Ethereum has seen a drop in value, as it lost 11.17%. The volume of Ethereum traded in the twenty-four hours to time of writing was $19.90B or 18.90% of the total volume of all cryptocurrencies. It has traded in a range of $2,812.1914 to $3,388.2209 in the past 7 days.
In this case FOREX ADVICE CLUB knows the better way to get profit.
Bitcoin was last at $38,698.3 on the Investing.com Index, down 8.20% on the day.
Tether was trading at $1.0003 on the Investing.com Index, a gain of 0.00%.
Bitcoin's market cap was last at $735.81B or 40.26% of the total cryptocurrency market cap, while Tether's market cap totaled $78.29B or 4.28% of the total cryptocurrency market value.
In yesterday's trading session, precious metal Gold bounced up according to the analysis from 1849 to 1868 ($ 19), after reaching this price zone, precious metal Gold has not shown any signs of correction, instead saw a good increase in strength, closed the session with a strong bullish candle around 1867 that concealed all the decreasing force of the previous candle next to it and in my opinion it is likely that in today's session the uptrend will still be maintained.
Moving to the H4 time frame we can see that the downward force is almost negligible and this high resistance area of 1870-1877 is unlikely to hold so in the beginning of today's session if the precious metal Gold has If there is a slight correction, this is a good price area for us to buy with a safe target around 1877 and beyond 1882-1888.
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Comex or commodity exchange is the primary futures and options market that is used to trade metals such as gold, silver, copper, etc. Investing in the Comex market is a good way to diversify your portfolio with assets other than stocks, gold, etc.
Investors can buy commodities directly in the spot market or derivative market by using futures or options. Investors usually focus on comex signals in order to gain a good position in the comex market.
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There are usually two types of traders in the Comex market - Hedgers and Speculators.
Hedgers
Hedgers are buyers or producers of commodities that take delivery of the original commodity when the futures contract expires. They take this position to cover their risk and therefore they are termed as hedgers.
Speculators
Speculators enter the market solely for the purpose of making a profit from the price movement or volatility of commodity futures contracts.
But it is important to remember that futures trading can be handled appropriately by the traders who have the expertise in the Comex market. And if you are new to it or planning to scale up your investments, we bring you the top Comex trading tips using our years of experience clubbed with the latest technology.
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Final Word
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