The NY session saw some classic directionless trading on the back of the upcoming holiday in the United States. Equities were better bid and broadly eked out a 0.9% gain despite a flat performance for the better part of the session. The bullish tone to risk assets saw the USD come under modest pressure as has been the case for the entire year thus far. Commodities were one of the big stories as oil jumped more than 3% to back above the level on new attacks by Nigerian militants. The fundamentals remain oil bearish and the IEA just cut its forecast for crude demand for the next five years. This should weigh on the currencies of the resource-based economies like Canada and Australia. Interestingly, oil prices have had little in the way of impact on the US dollar in the month of June, after witnessing an excellent negative correlation in May. So the strength in oil might not see commensurate weakness in the buck. Full text »
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