The dollar trimmed losses, but remained broadly under pressure against the other majors currencies on Thursday, despite the release of upbeat U.S. jobless claims data, as Donald Trump’s silence on future fiscal policies continued to weigh on the greenback.
The U.S. Department of Labor said initial jobless claims in the week ending January 7 increased by 10,000 to 247,000, from the previous week’s total of 237,000, while analysts had expected jobless claims to rise by 20,000 last week.
But the greenback remained under pressure after Donald Trump failed to offer details on his promises to boost fiscal spending and cut taxes, at a highly-anticipated news conference on Wednesday.
Elsewhere, the commodity-related loonie was boosted by rallying oil prices on Thursday, amid signs major oil producers are keeping their promise to cut production levels.
Today the U.S. is to round up the week with reports on retail sales, producer prices and a preliminary look at consumer sentiment, while Philadelphia Fed President Patrick Harker is to speak.
The Turkish lira rebounded from record lows against the broadly weaker U.S. dollar on Thursday, a day after posting the largest one-day decline since a failed coup in 2016, which attempted to overthrow the government of President Recep Tayyip Erdogan.
Emerging markets have been hard hit since Donald Trump’s surprise U.S. presidential election victory in November, as the prospects of rising U.S. interest rates prompted investors to pull cash out of developing economies.
Turkey has become particularly fragile also because of high levels of political and economic risk and relatively low central bank reserves to defend its currency. A string of terror attacks in Turkey, uncertainty over the outlook for economic growth and worries about political instability have all pressured the lira lower.
The lira has already fallen around 7% against the dollar so far this year, in spite of efforts by the country’s central bank to shore up the currency on Tuesday. On Thursday, President Erdogan blamed a conspiracy for the recent plunge of the lira, saying those who used the exchange rate as a weapon were no different from terrorists.
Pivot: 3.81Support: 3.81 3.759 3.735Resistance: 3.926 3.95 3.985Scenario 1: long positions above 3.8100 with targets at 3.9260 & 3.9500 in extension.Scenario 2: below 3.8100 look for further downside with 3.7590 & 3.7350 as targets.Comment: the immediate trend remains up and the momentum is strong.
Gold
Gold prices rallied to a seven-week high on Thursday, as the U.S. dollar sank after President-elect Donald Trump's highly-anticipated press conference failed to offer details on his plans to boost fiscal spending and cut taxes.
In his first press briefing as U.S. president-elect on Wednesday, Trump failed to give details on some of his economic policies, particularly deregulation, lower corporate taxes and fiscal stimulus, disappointing the dollar bulls. Trump has been credited with being a major catalyst behind the impressive rally since election day in the dollar and stocks, although he has yet to outline his economic policies in detail.
The precious metal has been well-supported in recent sessions after minutes from the Federal Reserve’s December meeting unsettled investors’ expectations about the pace of future interest rate hikes.
Pivot: 1185.5Support: 1185.5 1182 1179Resistance: 1191 1193 1197Scenario 1: long positions above 1185.50 with targets at 1191.00 & 1193.00 in extension.Scenario 2: below 1185.50 look for further downside with 1182.00 & 1179.00 as targets.Comment: the RSI is mixed to bullish.
WTI Oil
Oil prices rose more than $1 a barrel on Thursday, on reports key OPEC members were starting to cut production as promised and on forecasts of strong demand growth in China.
The OPEC agreed in November to cut oil production to try to reduce a global supply glut that has depressed prices for more than two years. Several OPEC members now appear to be implementing the deal. Saudi Arabian Energy Minister Khalid al-Falih said on Thursday the OPEC deal would accelerate the rebalancing of the global oil market and that prices would respond later this year.
Prices were also lifted by news of record Chinese car sales, which rose by 13.7% last year to 28 million sold vehicles. Reflecting China's growing fuel consumption, its net crude imports will rise 5.3% to 396 million tonnes in 2017, state-owned China National Petroleum Corp said on Thursday.
Today Baker Hughes will release weekly data on the U.S. oil rig count.
Pivot: 52.8Support: 52.8 52.58 52.1Resistance: 53.65 54 54.3Scenario 1: long positions above 52.80 with targets at 53.65 & 54.00 in extension.Scenario 2: below 52.80 look for further downside with 52.58 & 52.10 as targets.Comment: the RSI is bullish and calls for further advance.
US 500
The three major U.S. stock indexes declined on Thursday, as investors awaited fourth-quarter earnings and details of President-elect Donald Trump's economic policy, bringing a pause to a rally driven by his campaign promises of lower taxes and fiscal stimulus.
While stocks pared losses as the session wore on, all but three of the S&P 500's eleven sectors were still down, with the financial sector leading the decline a day ahead of its first major earnings reports. The S&P had risen 6.4% since the election of Donald Trump as president.
Today the U.S. is to round up the week with reports on retail sales, producer prices and a preliminary look at consumer sentiment, while Philadelphia Fed President Patrick Harker is to speak.
Pivot: 2270 Support: 2244 2240 2233 Resistance: 2270 2277 2287 Scenario 1: short positions below 2270.00 with targets at 2244.00 & 2240.00 in extension. Scenario 2: above 2270.00 look for further upside with 2277.00 & 2287.00 as targets. Comment: the RSI is bearish and calls for further decline.