USD Index is mixed as now markets are continuing to ad hopes for a summer rate hike, and markets starts preparing for next week’s NFP which is very likely to be the most volatile of this year. While EUR is soft, GBP remains the strongest currency of this week. Yesterday, US home sales data, showed a very strong expansion in the housing industry which further boosted USD across the board. The calendar is full today, with Crude oil inventories, and Bank of Canada rate decision standing out. 

Stocks: Equities staged a strong rebound yesterday after positive US data soothed fears that the US economy might not resilient to withstand the effect of a summer rate hike. DJIA closed up 213.12 pts, or 1.22%, at 17706.05. S&P 500 closed up 28.02 pts, or 1.37%, at 2076.06. Asian shares jumped also recovering from nearly 10 week lows.

Currencies: As mentioned above, the environment favors the USD currently. Evident is the USX index which measures the dollar’s performance against a basket of six major currencies, was holding steady at 95.604, after earlier climbing to a 2 month high of 95.661. While EURUSD was steady at 1.1145, a 10 week low, GBP is the only pair showing strength versus the USD backed from poll results that back the UK staying within the EU. AUDUSD was also steady after slipping to a 12 week low of 0.7145 on Tuesday, pressured by expectations of a rate cut by the Reserve Bank of Australia.

Oil and GOLD: A strong rebound in equities ignited a sharp selloff in GOLD which dropped from $1251 to as low as $1223, a 6 week low. Major support now lies at $1214 and $1205. Oil prices pushed higher to $50 a barrel, its highest in 7 months after data showed an increase in demand compared to previous weeks. Oil prices shrugged off the impact from a strong U.S. dollar which hovered close to a 10 week high against the euro.

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