This is what you need to know to trade today Monday June 13:
The markets remain risk averse at the beginning of the week and US dollar taps into safe-haven money flows. The DXY dollar index is up for the fourth day in a row and is nearing a multi-year high hit on May 13. The 10-year US Treasury bond yield remains near 3.2% and futures for US stock indices down between 1.5% and 2.5%. No big impact data will be released on the economic calendar and risk perception is likely to continue to drive market action.
On Friday, US data showed that the consumer price index CPI rose to a new multi-decade high of 8.6% annually in May. This data exceeded market expectations of 8.3% and made investors seek refuge. The S&P 500 index lost almost 3% and closed the previous week at 3,900. Over the weekend, the Financial Times reported that 70% of experts surveyed see the US economy entering a recession next year.
See: USA: CPI rises to a new four-decade high in May and threatens GDP
After spending the Asian session in a relatively tight channel, the pair EUR/USD started to decline amid broad dollar strength during the European morning. Now down 0.3% on the day at 1.0485.
The GBP/USD has fallen on Monday to its lowest level since May 16, below 1.2250. Data released by the UK Office for National Statistics has revealed that the British economy contracted 0.3% monthly in April, compared to the market expectation of an expansion of 0.2%. Other data from the UK showed that manufacturing output and industrial output contracted 1% and 0.6%, respectively, in the same period.
The pair USD/JPY hit its highest level in over 20 years, breaking above the 135.00 level during the Asian session on Monday. Japanese Chief Cabinet Secretary Matsuno has said that they were willing to take appropriate action on currency movements if necessary and caused a downward correction in the pair. Likewise, the governor of the Bank of Japan, Haruhiko Kuroda, acknowledged that the recent sharp drop in the yen was not desirable and was not good for the economy. USD/JPY is now posting modest daily gains at 134.75.
The Prayed rose sharply on inflation fears late on Friday and closed the week at $1,870. With the benchmark 10-year US bond yield remaining in positive territory, XAU/USD pulls back towards $1,860 on Monday.
The Bitcoin extended its decline over the weekend and ended up losing more than 11% last week. BTC/USD keeps falling and is now testing the $25,000 level, losing nearly 5% on the day. The ethereum It posted losses for the 10th week in a row and hit its lowest level since February near $1,300 on Monday.
Source: Fx Street
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