The Morning Update

The USD starts the day stronger, equities unchanged, oil prices hedge lower as treasury yields rise. Despite todays move higher, the USD is heading for weekly fall on the back of signs of cooling inflation and softening of the US economy. While there is nothing on the economic data front today, we may get some news from Fed officials’ speeches.

In other news.  U.S. military says aid is now being delivered into Gaza over a floating pier. Shaken by Slovakia’s prime minister’s assassination attempt, the EU wonders if June elections can be free of violence. Ukraine's defence lines stretched as Russian troops advance.

In currency news. The Chinese retail sales increased for the 15^th consecutive month but the softest gains in the period. Meanwhile, Industrial Production improved 6.7% YoY, surpassing the anticipated 5.5%. China announced steps to stabilize its property sector by facilitating a US$138B in extra funding, easing mortgage rules and local government buying some apartments. The AUD lost some ground largely due to the mixed Chinese economic data. The MXN remains stables as we end the week keeping its gains from last Wednesday’s rally. Former BOJ chief economist suggested the BOJ could raise the rate three times in 2024. The USD is gaining ground against the CNY (0.18%), JPY (0.29%), MYR (0.09%), AUD (0.40%), NZD (0.26%), ZAR 0.36% and MXN 0.12%

In commodity markets. Oil prices steadied and set for its first weekly gain in three weeks as economic indicators from big consumers China and the United States bolstered hopes for higher demand. Gold (up 0.3% today) is on track for its second weekly gain due to improve interest cut expectations. Silver followed the trend rising 0.4%. Copper rose 0.7% to a 25-month high after the Chinese announced their support for the property sector. Wheat is up 0.3% reaching a 10-month high on supply concerns due to Russia and Brazil’s weather conditions. Soybean prices are up 0.2%.

Current level USD Index               104.760           Up 0.29%

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The USD/CAD trades higher in early. The uptick is bolstered by the renewed USD demand as Fed officials emphasized their cautious stance tohold rates higher for longer. 

Current level USD/CAD               1.3639            Up 0.15%

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The EUR/CAD retraced after reaching a 2024 high but is expected to end the week higher.

Current level EUR/CAD                1.4789           Down 0.04%

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EUR/USD is off in early morning trading as market sentiment over upcoming interest-rate cuts turns slightly cautious after Fed policymakers supported keeping the monetary policy stance restrictive for alonger period.

Current level EUR/USD                1.0842           Down 0.20%

GBP/EUR remains stable as it trades within a tight range.

Current level GBP/EUR     1.1668(0.8566)        Up 0.05%

The GBP/USD remains stable after posting a monthly high Thursday. Market starting to focus on UK inflation data due tobe released next week.

Current levelGBP/USD                1.2654           Down 0.11%

Other ccy levels vs C$. GBPCAD 1.7257  AUDCAD.9070  CADCHF.6666 CADJPY 114.30  CADTHB 26.58  CADCNY 5.2979 CADNOK 7.8648 CADSEK 7.8891 CADDKK 5.0432  CADZAR 13.3885

Other ccy levels vs USD. JPY 155.87  CHF.9092 AUD.6650 NZD .6102  CNY 7.2268  MXN 16.6850  INR 83.3170 PLN 3.9359 CZK 22.785 ZAR 18.2704  ILS 3.7055  AED 3.6724 KWD 0.30711

Other Major X levels. EURCHF.9858  EURJPY 169.00 EURSEK 11.6722 EURNOK 11.6721 GBPCHF 1.1506  EURAUD 1.6302 GBPAUD 1.9026 AUDCHF.6047  AUDJPY 103.66  CHFJPY 171.37

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