Open: London Session | Forex, Metals, Oil, Agriculture June 17, 2021

investors

Currencies

The US dollar (USD) strengthened, and as a result, the dollar index posted an intraday gain of about 1 per cent, the highest daily gain since March 12, 2020. Dollar appreciating further would indicate a difficult period for the rupee.As the dollar strengthened, the price of crude oil declined yesterday. However, rising crude oil prices and the consequent higher inflation, along with the rising dollar can have a negative impact on the rupee. He said: A key element of our dollar negative view was a persistently dovish Fed that remained purposefully behind the curve and intentionally depressed interest rate volatility.
The U.S. dollar jumped as much as 0.9% in its biggest daily gain of this year. The Bloomberg Dollar Spot Index closed up almost 1%, its biggest move in about a year. While many dollar bears cut back short bets this week amid speculation the Fed could surprise, a quick look suggests there is more to go. At the interbank foreign exchange market, the domestic unit opened at 73.65 against the dollar, registering a decline of 33 paise over its previous close.
With plenty of room for U.S. real rates to rise, that is bullish for the dollar. the clearest consensus was that it meant a boost for the dollar.

Metals

US gold futures settled up 0.3 per cent at $1,861.40.Oil prices posted gains for the fifth straight day on an anticipated surge in demand alongside falling crude inventories. As per RBI data, total reserves stand at $605 billion, which includes foreign currency assets and gold.

Oil

Besides the crude oil price, the food inflation rose considerably, contributing to the overall increase in inflation. Brent crude gained 40 cents, or 0.5 per cent, to hit $74.39 a barrel, reaching its highest since April 2019, and running its gains to five straight days. The US Energy Information Administration (EIA), yesterday, reported a decline in crude inventory to 7.4 million barrels over the week, higher than the expected drop of 3.3 million barrels. US crude rose 3 cents to$72.15, after reaching $72.99, highest since October 2018.

United States

New projections from Fed officials showed an uptick in projection inflation in the near term, but the Fed did not indicate any significant rethinking of its approach, said analysts. The Fed said monetary support will remain until “substantial further progress” is seen on employment and inflation. “Markets moved quickly to price in the risk of earlier action and Fed fund futures shifted to imply a first hike by the end of 2022. While the Fed maintained status quo with respect to interest rate and asset purchases, the economic projections have taken centre stage.
That happened when Bernanke said the time would come to reduce the Fed s asset purchases. Either the Fed responds to this surge in inflation (as they started doing yesterday) or else the USD will not gain. But risks of a tantrum remain.What He Said .Now, what exactly has the Fed done, and why has it elicited such a response? Into the Fed meeting markets expected a dovish message and didn’t get it.
The Fed chairman who most reliably spurred stock markets higher was Ben Bernanke quite a remarkable achievement as he was at the helm through 2007 and 2008. Futures tied to the S&P 500 futures and the Dow Jones Industrial Average both lost 0.4% while Nasdaq-100 futures shed 0.3%.

Europe

There s goodwill around the table, said an EU official, but the ministers may fall short of agreeing on an ambitious work plan.

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