Friday Briefing: From DXY to Key FX Headlines; June 10, 2022

US Dollar Index Overview

• The DXY strengthens sharply after U.S. CPI data and touches 103.93 mark.
• The intraday high is 103.93 and low at 103.11 mark.
• A day Chart and H1 chart with triple EMA suggest bullish trend for the time being.
• Immediate hurdles are seen at 103.99 to 103.03 mark.
• A sustained close of either side on H1 chart requires for the further directions of the U.S. dollar.

Key Headlines for the FX market:

• China’s commercial hub of Shanghai will lock down millions of people for mass COVID-19 testing this weekend – just 10 days after lifting its grueling two-month lockdown – unsettling residents and raising concerns about the business impact.
• Iran dealt a near-fatal blow to chances of reviving the 2015 nuclear deal as it began removing essentially all the International Atomic Energy Agency monitoring equipment installed under the deal, IAEA chief Rafael Grossi said.
• Britain will present legislation to parliament on Monday to unilaterally revise the post-Brexit trade arrangements for Northern Ireland, raising the risk of a trade war and a new clash with Brussels.
• The U.S. Federal Reserve will hike its key interest rate by 50 basis points in June and July, with rising chances of a similar move in September, according to a Reuters poll of economists who see no pause in rate rises until next year.
• China’s factory-gate inflation cooled to its slowest pace in 14 months in May, depressed by weak demand for steel, aluminum and other key industrial commodities due to tight COVID-19 curbs and bucking the global trend of rapidly accelerating prices.
• Japan’s government and central bank said they were concerned by recent sharp falls in the yen in a rare joint statement, the strongest warning to date that Tokyo could intervene to support the currency, which has sunk to 20-year lows.
• U.S. bond funds witnessed massive outflows in the week to June 8 after a weekly inflow, as a better-than-estimated payrolls report made the case for a faster pace of interest rate hikes.
• The Bank of England looks set to raise interest rates next week for the fifth time since December, its steepest run of rate hikes in 25 years, and is likely to keep going in the coming months as inflation heads for double digits.
• Russia’s central bank cut its key interest rate to the pre-crisis level of 9.5% on Friday and said it would continue to explore the scope for more cuts as inflation slows from near 20-year highs and economic contraction looms.

Latest updates on Russia – Ukraine Conflicts:

• Ukrainian forces were holding their positions in intense street fighting and under day and night shelling in Sievierodonetsk, officials said, as Russia pushes to control the bombed-out city, key to its objective of controlling eastern Ukraine – Reuters.
• Ukraine needs assurances on ports to ship grains, Italy’s Draghi says – Timesofindia.

Keep an eye open for the latest news and fundamentals affecting the FX markets.

Take a look and do trade wisely!
Good Luck