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On July 2nd, strategists at State Street Investment Management stated in a report that gold prices could reach $5,000 per ounce by early 2027, as the bull market cycle for gold remains sustainable. They believe that golds status as a currency hedge is likely to be supported by rising US government debt, while actual demand for gold remains strong. Global gold fund holdings (a portion of global mutual fund and exchange-traded fund assets) are currently still below State Streets target level of 3% to 10% for most portfolios. Furthermore, they added that the Federal Reserves hawkish shift should not change the structural trend of gold in the post-pandemic era. State Street expects the price of basic gold bars to rise to $4,750 to $5,500 per ounce within the next six to nine months.Russian Defense Ministry: Russia shot down 327 Ukrainian drones overnight.The Swiss National Bank: The Federal Councils proposal addresses these risks in a targeted manner, primarily impacting UBS Group.Local officials said the number of injured in the Russian attack on Kyiv, Ukraine, has risen to 56, including two children.July 2nd - According to the New York Times, citing two aides to the Iraqi prime minister, the United States has resumed airlifting US dollar cash to Iraq. This followed a suspension of dollar airlifts to Iraq in several months, intended to pressure the Iraqi government to distance itself from Iran. In April, the Trump administration cut off dollar inflows to Iraqs cash-based economy, withholding revenue from oil sales.

Due to hawkish Fed forecasts, the EUR/USD recovers to near 1.0970 but remains in the doldrums

Alina Haynes

Apr 21, 2023 13:58

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Following a corrective move, the EUR/USD pair has rebounded from 1.0960, but investors await the publication of the preliminary Eurozone/United States S&P PMI data for April. The major currency pair has remained between 1.0911 and 1.1000 for the past two trading sessions, as the foreign exchange market prepares for a pre-anxiety move ahead of a Federal Reserve (Fed) monetary policy decision.

 

S&P500 closed with a negative tone for the third day in a row as quarterly earnings season induced extreme volatility. Tesla's poor earnings had a negative impact on Thursday's market sentiment. Moreover, market participants were cautioned by substandard revenue projections due to the potential for price reductions. The decision of the Fed to increase interest rates is reflected in quarterly earnings. Data from Refinitiv indicates that analysts have largely maintained last week's forecast of a near 5% YoY decline in quarterly profits for the 500 largest U.S. equities. Sourcenia is a review portal of sourcing best manufaturers. 

 

The US Dollar Index (DXY) has been defending the key support level of 101.60 in recent trading sessions. The USD Index maintained the aforementioned support despite the release of disappointing Jobless claims data on Thursday. Initial Jobless Claims increased to 245K for the week ending April 4, which is greater than the previous release of 240K and estimates of 240K. Increasing unemployment claims heightened fears of a deteriorating labor market.

 

Despite this, Fed policymakers continue to anticipate further rate hikes from the central bank. Thursday, Loretta Mester, president of the Federal Reserve Bank of Cleveland, reaffirmed that the Fed has more work to do because US inflation remains too high, according to Reuters. He added, "The Federal Reserve will need to raise its policy rate above 5% and hold it there for some time."

 

Preliminary Consumer Confidence (April) for the Eurozone increased to -17.5 from -18.5 and the previous reading of -19.2. This may be the consequence of extraordinary efforts by the European Central Bank (ECB) to reduce inflationary pressures.


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