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The bad news of the data hit the US dollar, and the pound and gold became a difficult brother.

March 15, 2019 00:36
source: FX168

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On Thursday (March 14), the US market was in early trading. Although the latest US initial jobless claims and new home sales data were not performing well, the US dollar index remained capricious and rose to a high of 96.82. In the dollar recovery, the pound is mainly non-UScurrencyAnd the spot gold and silver is "falling interest". GBP/USD once fell more than 100 points, and investors are now concerned about the votes of parliamentarians on postponing voting later today. As the dollar rose, spot gold fell more than $15 to below the $1300/oz mark.

Data continues to send bad news, the dollar is willful

US new home sales in January fell 6.9%, close to the biggest monthly decline since December 2017, which was created in October last year. It may be a sign that buyers are temporarily buying homes during the government shutdown.

According to the US Department of Commerce, the sales volume of new homes in January was adjusted to 607,000 units, which was lower than the 652,000 units in December.

Partial shutdowns in the US government in January and a plunge in the stock market all seem to have hit home sales despite mortgagesinterest rateThe decline eased the pressure on home purchases and boosted the interest of buyers. The volume of buildings to be built in January fell 26.8%, which was the reason for the overall decline in January. Sales of homes already under construction have increased. The median sales of new homes in January fell 3.8% to $317,200.

The initial data released earlier was also underperforming. The number of people filing for unemployment benefits in the US on March 9 was 229,000, with an expected 225,200 and a previous value of 223,000.

The number of US jobless claims rose more than expected last week, suggesting that the job market has begun to slow down, but may not have reached the level of employment growth in February. As workers become scarcer, the expansion of the labor market has begun to slow.

The stimulus for the US 1.5 trillion tax reform program has begun to weaken, and employment has also been limited by the slowdown in economic growth. In addition, the uncertainty caused by the slowdown in overseas demand and the Brexit issue is also damaging US economic activity, which may also lead to a cooling of the job market.

. This may also mean that the Fed shows more patience on the agenda of restarting the rate hike.

In the early morning of the US market, the US dollar bullish counterattack, with the highest attack to 97.82, which was the first time since the five trading days.

Technically, the upward resistance of the US dollar is in the 96.90-97 range. After the break, it is expected to test the March 7 high near the 97.70 line. The lower support will focus on the 96.50-96.30 range. After the break, it is expected to accelerate back to the 96 mark.

After the overnight surge, the pound fell from a high level and focused on voting tonight.

As the dollar rebounded, the G10 currencies such as the euro and the pound fell across the board, and the pound volatility was the most dramatic.

After the overnight sterling surge, the sterling investors also did not stop, but also fell more than 100 points, the lowest 1.3206, almost fell below 1.32. Overnight, the pound hit a high of 1.3382, the highest since June last year.

According to Bloomberg, the British government is in trouble and the parliament is in a deadlock. Members will vote on Thursday to decide whether to postpone the Brexit. They have previously rejected the situation of no agreement to leave the EU.

The British government said that if it fails to pass the delay in the Brexit agreement on March 20, the EU will decide to extend the time limit; if it can delay the Brexit agreement by March 20, it will seek to extend the Brexit period for a short time, and the government will seek to use the Clause 50 thus defers the Brexit deadline to June 30th.

British House of Commons leader Lid Som said that the most likely scenario is that the EU will require the UK to provide a clear reason for the extension.

British Chancellor of the Exchequer Hammond reiterated his call for parliamentarians to have the opportunity to choose the way forward. Hammond continued to be intensively interviewed by the media. He told the BBC that "confidence" lawmakers will vote to postpone the Brexit today.

According to a Bloomberg survey, Wall Street strategists predict that the pound's volatility may be as high as 10% this week.

Jingyi Pan, strategist at IG Asia Pte in Singapore, said that the UK seems to be unable to reach an agreement on the Brexit agreement, and that uncertainty will continue to undermine the popularity of the pound. This year, the volatility of the pound is the highest among the G-10 currencies.

“Without a clear resolution, the closer to the Brexit deadline, the more nervous the market will be,” she said in Singapore. "You will only see a further increase in short positions."

Financial website ForexliveAnalystGreg Michalowski pointed out that the trend of the British pound against the US dollar today, the low point broke through the 50% Fibonacci retracement from the high point of 1.3379 to Tuesday's low of 1.3213, fell to 1.3206, and then began to rebound, the target looks 1.3286, this is the high point of this Tuesday and March 1.

Yesterday, the British House of Commons vetoed no agreement to leave the European Union, the pound against the US dollar soared to break through this high, and finally set a new high of 1.3379 this year and began to callback. It is necessary to pay attention to the 1.3286 level. If it rises above this level, today's high point is expected to break through 1.3330.

The selling tide is over, and gold is once again losing its mark.

The price of gold fell on Thursday, falling below the key technical support of $1,300. After the British parliament voted against the non-agreement, the dollar rose slightly, while the rise in European stock markets further weakened the attractiveness of gold.

At the time of the US dollar counterattack, spot gold suffered a sharp sell-off, with a minimum of $1,129.50 per ounce, a drop of more than $15; spot silver fell by more than 2%, with a minimum of $15.10 per ounce.

“The pressure on gold prices is the result of a combination of factors; weak Chinese economic data is putting pressure on industrial demand, risk appetite, a rebound in yields, a higher US dollar and a stronger UK stock market,” said Forex.com analyst Fawad Razaqzada.

In the first two months of this year, China's industrial output growth rate fell to a 17-year low, indicating further weakness in the world's second largest economy.

European stocks rose to a five-month high after the British parliament rejected the non-agreement Brexit program, eliminating a key uncertainty. The dollar strengthened against a basket of currencies.

On Wednesday, British lawmakers refused to leave the EU without an agreement and paved the way for the next vote, which may postpone Britain's Brexit at least until the end of June.

The British Parliament is scheduled to postpone the Brexit until late March 29th.

German businessbankThe analyst said in a report: "Participants in the gold market seem to be tired of the Brexit problem and are tired of the whole problem."

On the other hand, the price of gold has risen by about 13% since hitting a one-and-a-half-year low in August last year. The recent gains are driven by the Fed's patience with monetary policy and concerns about the global economic slowdown.

lowerinterest rateIt tends to put pressure on the dollar and increase investor interest in gold, while higher yields will reduce the attractiveness of gold.

Moderate inflation data reinforces the view that the Fed will be patient with future interest rate hikes at next week's meeting.

Forex.com's Razaqzada said, "I have a positive view on the recent gold price, as central banks are more moderate than expected recently, interest rates will remain low for a long time, and the dollar may weaken."

FXStreet analyst Haresh Menghani said that the weaker gold was triggered by a sharp rebound in US bond yields. Subsequently, the rebound in demand for the US dollar put additional downward pressure on gold, and as gold fell below the psychological threshold of $1,000, it further exacerbated bearishness. The pressure, and the economic data released today in the United States also failed to provide a respite for the gold bulls.

With today's plunge, gold almost wiped out the gains in the week, and the subsequent downtrend may cause it to fall below the support of $1290. If it falls below $1,290, it may further accelerate the decline to the $1,286-85 area; in the upside, the first resistance is $1,297. If it breaks, it may pull the gold back and test the $1,309-10 area.

(Article source: FX168)

                (Editor: DF155)

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