America’s Roundup: US dollar drops after Fed's Powell hints at June pause , Wall Street slips, Gold gains, Oil slips as debt talks pause, Fed warns of high inflation

Market Roundup

• Canada Mar Core Retail Sales (MoM) -0.3%,-0.8% forecast,-0.7% previous

• Canada Mar Retail Sales (MoM) -1.4%, -1.4% forecast,-0.2% previous

•U.S. Baker Hughes Total Rig Count 720, 731 previous

•U.S. Baker Hughes Oil Rig Count 575, 586 previous

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Currency Summaries

EUR/USD: The euro strengthened against dollar on Friday as traders slashed bets for another interest rate hike following comments from Fed Chair Jerome Powell on monetary policy. Fed Chair Jerome Powell said it was still unclear if U.S. interest rates will need to rise further, as central bank officials balance uncertainty about the impact of past hikes on borrowing costs.Markets now see an 82% chance of the Fed holding rates until July. The euro rose 0.3% to $1.0806, posting a weekly fall of 0.8% .Immediate resistance can be seen at 1.0824(5DMA), an upside break can trigger rise towards 1.0899(23.6%fib).On the downside, immediate support is seen at 1.0752 (38.2%fib), a break below could take the pair towards 1.0755(50%fib).

GBP/USD: The pound was heading for its second straight weekly fall against the dollar on Friday, weighed down by a resurgent dollar and weakness in the British economy. Data released on Tuesday added to the downward pressure on sterling by making it more likely that the Bank of England will hold interest rates at the current 4.5% level. It showed that British unemployment ticked up to 3.9% in the three months to March and basic pay increased 6.7%Sterling was up 0.15% to $1.243 on Friday. It was set for a weekly loss of 0.17%, however, after falling 1.45% the previous week. Immediate resistance can be seen at 1.2478 (5DMA), an upside break can trigger rise towards 1.2572 (23.6%fib).On the downside, immediate support is seen at 1.2385 (38.2%fib), a break below could take the pair towards 1.2320(Lower BB).

USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Friday but held on to much of its weekly gain, as domestic data showed retail sales fell in March and negotiations to raise the U.S. debt ceiling paused. Canadian retail sales fell 1.4% in March from February on lower sales at motor vehicles and parts dealers, as well as gasoline stations, Statistics Canada said on Friday. A preliminary estimate showed sales rising 0.2% in April. The loonie edged 0.1% lower to 1.3510 to the greenback, or 74.02 U.S. cents, after trading in a range of 1.3470 to 1.3523. .Immediate resistance can be seen at 1.3511 (21 DMA), an upside break can trigger rise towards 1.3522 (38.2% fib).On the downside, immediate support is seen at 1.3482 (50% Fib ), a break below could take the pair towards 1.3438 (61.8% Fib).

USD/JPY: The dollar fell against Japan's yen on Friday after Federal Reserve Chair Jerome Powell struck a moderately dovish stance, contrary to market expectations, saying that given how credit conditions have tightened, the U.S. central bank may not need to raise interest rates as much.A pause in negotiations to raise the federal government's $31.4 trillion debt ceiling also pressured the dollar.But it was Powell who caught the market by surprise. Tighter credit conditions mean that "our policy rate may not need to rise as much as it would have otherwise to achieve our goals," Powell said at a central bank conference in Washington. Strong resistance can be seen at 139.06(23.6%fib) an upside break can trigger rise towards 139.43(Higher BB).On the downside, immediate support is seen 137.47(5DMA), a break below could take the pair towards 136.06(38.2%fib)

Equities Recap

European stocks rose on Friday and Germany's blue-chip index hit a record high as hopes of progress in U.S. debt ceiling talks boosted risk sentiment, although negotiations appeared to have reached an impasses moments after markets closed.

UK's benchmark FTSE 100 closed up by 0.19 percent, Germany's Dax ended up by 0.69 percent, France’s CAC finished the day upby 0.16 percent.

U.S. stocks closed out the trading week on a soft note on Friday as early gains dissipated after U.S. debt ceiling negotiations in Washington were paused, denting optimism a deal could be reached in coming days to dodge a default.

Dow Jones closed down by 0.33% percent, S&P 500 closed down by 0.14 % percent, Nasdaq settled down by 0.24 %percent.

Treasuries Recap

U.S. Treasury yields ended mostly higher on Friday after an intra-day stumble amid renewed uncertainty over a debt ceiling deal, lingering banking industry concerns, and comments by Federal Reserve Chair Jerome Powell viewed as dovish.

Two-year yields , in particular, dropped by over 10 basis points, though they then pared some of those losses and ended the day higher at 4.287%.

Commodities Recap

Gold rallied 1% on Friday, recouping some losses from earlier this week, on renewed worries about the stability of the banking sector, while traders slashed bets for another interest rate hike following remarks from the U.S. Federal Reserve chairman.

Spot gold gained 1.2% to $1,981.79 per ounce by 12:30 p.m. ET (1830 GMT). U.S. gold futures settled 1.1% higher at $1,981.60.

Oil prices fell on Friday, as investors worried that U.S. politicians will fail to agree on a new debt ceiling and trigger a default that would hurt the economy and reduce fuel demand.

Brent futures settled 28 cents, or 0.8%, lower at $75.58 a barrel, while West Texas Intermediate U.S. crude for July expiry fell 25 cents, or 0.3%, to $71.69.