The dollar continues to decline ahead of Nonfarm Payroll data
The US dollar continued its drop to multi-month lows versus the majority of its rivals. Riding on the back of continuing optimism and weak US data, which bolstered the Federal Reserve’s monetary policy shift.
The BOJ weakened the US dollar at the start of the trading day. Asahi Noguchi, a member of the Bank of Japan’s board of directors, stunned investors by stating that the central bank is prepared to withdraw stimulus if inflation figures look too high.
In October, the US Personal Consumption Expenditures (PCE) Price Index increased by 6% YoY, down from 6.3% in September. In the same time, core PCE inflation came in at 5%, down from 5.2% in September. In addition, the ISM Manufacturing PMI dipped to 49 in November, down from 50.2 in October, marking the first time since May 2020 that the index indicates contraction.
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Despite worse Eurozone GDP data, EUR/USD has reclaimed the 1.0500 level and is trading above it. GBP/USD hovered around 1.2250 before the US market’s closure. The AUD/USD pair trades in the vicinity of 0.6810, while USD/CAD concluded the day in the region of 1.3430 as the poorest performer.
Stocks closed mostly neutral following mixed data
The S&P 500 took a pause on Thursday following a Powell-fueled rise the previous day. Investors digested conflicting economic data indicating a decline in industrial output and a decline in inflation. The S&P 500 was unchanged, while the Dow Jones Industrial Average lost 164 points, or 0.48%, and the Nasdaq gained 0.3%. The stock prices of Synchrony Financial, SVB Financial Group and Bank of America Corp declined, more than 2%.
Following a day of gains, tech stocks were divided, with Apple trading neutral as Wall Street continues to fret over the implications of decreased iPhone manufacturing. As a result of supply chain issues in China, Piper Sandler lowered its projection for fourth-quarter iPhone sales to 74 million units from an earlier estimate of 83 million.
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Netflix Inc continued to gain ground, increasing 4%. Salesforce on the other hand fell more than 8% on the surprise announcement of co-CEO Bret Taylor’s retirement.
Gold reaches a 5-month high on rising expectations of a Fed rate shift
After 15 weeks of being tied to a price of $1,700 or less, gold broke free on Thursday to reach a 5-month high above $1,800 an ounce. This was caused by weakening U.S. inflation and job growth pointed to the probability of lighter Federal Reserve rate hikes.
The benchmark February contract for U.S. gold futures finished at $1,815.20 per ounce on the New York Comex, up $55.30, or 3.1% on the day. The session high was $1,818.25, the highest level since June 30th when gold traded at $1,830.
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The spot price of gold, which some traders track more closely than futures, was $1,800.62 per ounce during the day. The day high for spot gold was $1,803.99, while it actually closed the day not much lower.
Silver, which frequently mirrors the direction of gold, rose substantially into the start of December. The benchmark futures contract on Comex reached a seven-month high of $22.94 and spot silver reached a similar milestone of $22.40. Month-to-date, silver is up 5%, following an almost 14% increase in November.