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CRUDE OIL & GOLD TALKING POINTS:

  • Crude oil price[1] chart continues to warn of an emerging top
  • Monthly IEA report, EIA inventory data may inspire selling
  • Gold prices[2] testing critical support after Fed-linked decline

A sharp US Dollar rally[3] weighed on crude oil and gold prices alike. Swelling Fed rate hike bets drove the currency higher alongside front-end bond yields. The spread between rates on two- and ten-year Treasury bond rates tellingly steepened and the 2019 policy path implied in Fed Funds futures reflected a hawkish shift in the markets’ expectations.

The WTI benchmark succumbed to de-facto selling pressure since prices are denominated in USD[4] terms on global markets, but managed to claw back most of the loss to finish the day little-changed. The yellow metal was not so lucky, suffering the largest daily drop in ten months as demand for anti-fiat and non-interest-bearing assets evaporated.

IEA REPORT, EIA INVENTORY DATA, FED-SPEAK

From here, a lull in top tier US news flow might allow for a bit of consolidation in Fed-linked volatility. Scheduled comments from Raphael Bostic and James Bullard – presidents of the US central bank’s Atlanta and St Louis branches, respectively – seem unlikely to be groundbreaking enough to stoke lasting volatility. That might allow gold a bit of a corrective bounce as yesterday’s losses are digested.

Meanwhile, crude oil will turn its attention to a monthly report from the IEA as well as EIA weekly inventory flow data. The former will inform global supply and demand expectations and may help establish the

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The Logo Story

currensceneFLOGO WHTsquareThough not the oldest form of currency, some form of shell money appears to have been found on almost every continent. The shell most widely used worldwide as currency was the shell of Cypraea moneta, the money cowry.

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