Market review: Dollar relief from solid US data

Last Thursday, the US Dollar reversed early losses against its peers, after upbeat US economic data put the focus back on a widely anticipated increase in interest rates by the Federal Reserve. The number of Americans receiving jobless benefits fell to a 28- year low of 232k and the Philadelphia Federal Reserve’s Business Index rose to 38.8, double economists’ expectations of 22.0.

The Dollar got also a boost from a higher spike in US Treasury Yields that coincided with session highs in US Stocks, which recovered from their worst day in more than eight months.

Early on Friday, the British Pound gave up yesterday’s gains and tumbled after jumping above $1.30 against its US counterpart for the first time since September, with UK retail sales gaining more than expected in April as nice weather prompted Britons to splurge on their homes and gardens. The office for National Statistics said that the volume of goods sold in stores and online increased 2.3% after a 1.4% drop in March beating expectations of a 1.1% rise.

On Friday as well, Oil Futures rose to the highest in nearly a month on growing optimism that big producing countries will extend output cuts to curb a persistent glut in Crude, with key benchmarks heading for a second week of gains. Since March, Crude prices have swung from over $56 a barrel to under $47 as market participants were divided over the impact of rising output from the United States versus production cuts by OPEC and other countries, including Russia. However, market watchers are growing more confident that OPEC, Russia and other big producers will extend cuts of almost 1.8 bpd until the end of March 2018.