America’s Roundup: Dollar climbs as U.S.-China tensions lift greenback, Wall Street ends mixed, Gold firms, Oil drops 4% on China-U.S. tensions, energy demand doubts-May 23rd 2020

Market Roundup

• China plan for HK security law raises tensions with U.S.

• Oil price falls hit commodity currencies

• Canadian retail sales fall by 10% in March

• Canada March Retail Sales (MoM) -10.0%, -10.0% forecast, 0.3% previous

• Canada March Core Retail Sales (MoM) 0.4%, -5.0% forecast, -15.6% previous

• Russia April PPI (YoY)  -10.4% -3.2% previous

• Russia April PPI (MoM) -7.2%, -1.4% previous

• U.S. Baker Hughes Total Rig Count 318, 339 previous

Looking Ahead Economic Data

• No economic data ahead

Looking Ahead - Events, Other Releases (GMT)

• No significant events  

Currency summaries 

EUR/USD: The euro declined against greenback on Friday as as risk sentiment took a hit after Hong Kong became the latest front in intensifying tensions between Beijing and Washington. China plans to impose a new national security legislation on Hong Kong, a move that prompted a U.S. warning as a high-degree of autonomy and respect for human rights were key to preserving the territory's special status under U.S. law, which has helped Hong Kong maintain its position as a world financial center. The euro slipped 0.5% against the greenback. Immediate resistance can be seen at 1.0960 (38.2 % fib), an upside break can trigger rise towards 1.0985 (Higher BB).On the downside, immediate support is seen at 1.0883(5 DMA), a break below could take the pair towards 1.0834 (23.6 % fib).

GBP/USD: Sterling edged lower against the dollar on Friday as tensions between China and the United States boosted demand for the greenback. Tensions between the world’s two largest economies encouraged investors to bet on safe heaven assets and sterling weakened against a broadly stronger U.S. currency for a third consecutive day. The pound was also under pressure after data on Friday showed that UK retail sales fell by a record 18% in April as the coronavirus lockdown hit consumer spending. Immediate resistance can be seen at 1.2240 (11 DMA),an upside break can trigger rise towards 1.2330 ( 20 DMA).On the downside, immediate support is seen at 1.2162 (Daily low), a break below could take the pair towards 1.2085 (Lower BB).

USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Friday as oil prices fell and domestic data showed a record decline in retail sales, with the loonie giving back some of this week's rally. The price of oil, one of Canada's major exports, fell as tensions rose between the United States and China. Canadian retail sales fell by 10% in March from February as the economy started feeling the effects of the coronavirus pandemic, while the advance results for April indicate a near 16% decline. At (1644 GMT), the Canadian dollar was trading 0.3% lower at 1.3991 to the greenback. Immediate resistance can be seen at 1.4058 (61.8% fib), an upside break can trigger rise towards 1.4011 (21 DMA ).On the downside, immediate support is seen at 1.3930 (38.2% fib), a break below could take the pair towards 1.3856 (23.6% fib).

USD/JPY: The dollar dipped against the Japanese yen on Friday as demand for safe haven yen increased after China’s move to impose a new security law on Hong Kong threatened to escalate Sino-U.S. tensions. U.S.-China friction came to the fore again over the source of the coronavirus and escalated further with China’s proposal to impose security laws on Hong Kong, drawing flak from Washington. The tensions compounded fears of a slower global economic recovery, pressuring equity markets but supporting the yen, also considered a safe haven. Strong resistance can be seen at 107.77 (38.2 % fib), an upside break can trigger rise towards 108.17 (Higher BB).On the downside, immediate support is seen at 107.57 (30 DMA), a break below could take the pair towards 106.57 (50 % fib). 

Equities Recap

European shares closed unchanged on Friday although rising U.S.-China tensions hit Asia-exposed banks and luxury stocks, while hopes of a global recovery kept weekly gains intact for the main indexes.

UK's benchmark FTSE 100 closed down by 0.37 percent, Germany's Dax ended up by 0.07 percent, France’s CAC finished the day down by 0.02 percent.

Wall Street was mixed on Friday in a mostly tame finish to a week of strong gains, as investors gauged China-U.S. tensions and amid ongoing uncertainty about the pace of economic recovery from the coronavirus.

Dow Jones closed down by 0.04 percent, S&P 500 ended up by 0.24 percent, Nasdaq finished up by 0.43 percent.

Commodities Recap 

Oil prices tumbled about 4% on Friday on rising U.S.-China tensions and doubts about how quickly fuel demand would recover from the coronavirus crisis.

Brent crude futures fell $1.53, or 4.2%, to $34.53 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $1.20, or 3.5%, to $32.72 a barrel.

Gold gained on Friday as intensifying U.S.-China tensions compounded fears of a slow recovery in a global economy already reeling from the coronavirus pandemic.

Spot gold rose 0.4% to $1,732.62 per ounce by GMT. by 12:24 p.m. EDT (1624 GMT), after falling 1.4% on Thursday, and was headed for a small weekly decline. U.S. gold futures was up 0.6% to $1,732.30.