Market Drivers – US Session 16/09/2022

Mohamed Abdelhamid 17 September, 2022 2:29 am Commodities, Forex Market, Market Update

Most investors are worried about an aggressive Fed’s hike that could knock the US economy into a recession.

At the time of writing, the USD/CAD is trading at 1.3293, above its opening price by 0.51%. The Canadian dollar weakened versus the solid US dollar, piercing the 1.3300 mark briefly during the North American session.

A risk-off impulse keeps most G8 currencies heavy. The dollar pared some earlier losses, as shown by the US Dollar Index, almost flat at around 109.704, yet still 0.04% down.

Economic Data

US economic data released by the University of Michigan showed that US consumers remain slightly upbeat regarding the US economy. The Consumer Sentiment in September rose to 59.5, below estimates by a notch but better than the 58.6 achieved in August.

UK data revealed that retail sales in August tumbled more than the estimated 0.5% contraction, falling 1.6% MoM, adding to recession fears amidst a tightening cycle by the Bank of England.

Other Developments

Wall Street closed out the stock market’s worst week in three months with more losses Friday, as a stark warning from FedEx about rapidly worsening trends in the economy rattled already anxious investors.

The S&P 500 fell 0.7%, with all but two of its 11 company sectors ending in the red. The benchmark index sank 4.8% for the week, with much of the loss coming from a 4.3% rout on Tuesday following a surprisingly hot report on inflation. The last time it posted a bigger weekly decline was the week ended June 17.

UK Prime Minister Liz Truss announced last week an energy bill that will put a lid on energy prices for two years, which would likely cost about 100 billion pounds.

Gold was able to take advantage of the US dollar’s limited loss to make gains throughout the trading session on Friday in an attempt to penetrate the selloff it has slipped into in the past sessions.

Gold futures rose to levels higher than 1673 dollars an ounce, while the highest levels reached by gold futures contracts 1680 dollars an ounce.

On the other hand, the lowest level for the precious metal in the current session was recorded at $ 1654, which indicates the lowest levels since April 2020.

The limited recovery of the precious metal came from taking advantage of the decline in the US dollar, which started to rise after a spotted decline in US Treasury bond yields.

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