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Forex outlook:
The yen gained broadly for a third straight session on Wednesday, as volatile global stock markets and concerns about a fallout from the U.S. subprime mortgage sector prompted investors to close out carry trades. “Smart money is starting to take chips off the table and they're taking profits in carry trades," said Manfred Wolf, director of corporate FX sales at HVB Bank in New York. "There's also some fear involved in these trades because we are coming to a quarter-end and institutional investors have to show a profit," he added. In mid afternoon trade, the dollar was down 0.7 percent at 122.41 yen , its worst one-day decline in two months Earlier, the greenback fell to a two-week low around 122.23 yen. The Euro was down 0.7 percent at 164.54 yen according to electronic trading platform EBS, more than 2 yen below last week's record highs.
Market nervousness about growth further pushed the dollar to session lows after a U.S. report showed new orders for durable goods tumbled more than expected in May, the first decline since January. The Federal Reserve started a two-day monetary policy meeting on Wednesday. The Fed, the U.S. central bank, is widely expected to keep benchmark interest rates steady at 5.25 percent. "The key area is their commentary on inflation. Fed still stuck (between) the rock (of inflation) and hard place (enough growth) to keep them on hold until after the end of the year," said Andrew Busch, global FX strategist at BMO Capital Markets in Chicago.The U.S dollar was traded around the levels of 1.3445 against the Euro ,122.65 against the yen and 1.9985 Vs the sterling at 19:50(GMT).
Crude Oil: U.S. crude oil futures jumped more than 1 percent higher midday on Wednesday as surprise drawdown in gasoline and distillate supplies in a key government report spurred supply concerns. The fall down in the Gasoline inventories comes at the pick of the “driving season” and generated a fierce bullish reaction from the traders. The weekly inventory report was "certainly supportive in the sense that we were looking for builds in distillate and Gasoline and we got draws instead," said Tim Evans, energy Analyst at Citigroup Global Markets. The crude oil contract for August was traded around the levels of 69$ a barrel at 18:45 (GMT).
Gold: Gold in New York extended losses to a three-month low after technical signals suggested the price was poised to fall. Gold traded below its 200-day moving average yesterday, a technical indicator that the price had further to fall. Gold futures for August delivery fell 50 cents to $644.80 an ounce on the Comex division of the New York Mercantile Exchange, the lowest closing price for a most-active contract since March 14. The metal still is up 1.1 percent this year after six annual gains. ``There's a clear down trend,'' said Frank McGhee, head metals trader at Integrated Brokerage Services LLC in Chicago. ``It could take a day or a week but gold is below the 200-day moving average and that's a negative.'' Gold may fall to $625 before rebounding as the dollar weakens, said Walter Otstott, senior broker at Dallas Commodity Co. in Dallas. ``Longer-term, gold will be OK,'' Otstott said. ``It's about investor participation. This is a healthy liquidation of weak longs.''
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