What you need to know to operate this Thursday May 26:
The greenback tried to recover ground, but clipped its advance during US trading hours. The FOMC Minutes showed that all members supported the balance sheet reduction plans, while some added that once the reduction was well under way, it would be wise to consider selling mortgage-backed securities.
Likewise, all the participants in the central bank’s monetary policy meeting held in May agreed on the advisability of raising interest rates by half a percentage point, while the majority considered that such an increase would be appropriate in the following meetings. The chances of a 0.50% rate hike in September have diminished considerably with the news, which in turn gave Wall Street a belated boost. Indices posted significant gains before the close, after spending the day around their opening levels.
US government bond yields were flat and ended little changed on Thursday.
The rising tensions between the US and Chinaafter US President Joe Biden said his country would militarily defend Taiwan in the event of a Chinese invasion, weighed on market sentiment, along with slowing economic growth and persistent inflation.
The European Central Bank published the Financial Stability Reportwhich took its toll on the common currency, as policymakers noted that “a sharp rise in real interest rates could induce corrections in house prices”, while adding that “further corrections could be triggered in markets due to a war escalation, even weaker global growth or if monetary policy needs to be tightened more quickly than expected.
Data continued to disappoint as US Durable Goods Orders rose a modest 0.4% in April, below the 0.6% expected.
The pair EUR/USD trades around 1.0680, while the GBP/USD reached fresh daily highs late in the day, now trading around 1.2570. The currencies linked to raw materials advanced during the American session against the dollar, with the USD/CAD going down to 1.2810 and the AUD/USD pressing the figure of 0.7100.
The Prayed it recovered from $1,841.84 a troy ounce, a new weekly low, to settle around $1,855. Crude oil prices remained stable, as the WTI It is trading at $110.60 a barrel.
Source: Fx Street
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