West Texas Intermediate (WTI) crude oil prices remain under extreme pressure. This latter reality is prompting worries about demand going forward. WTI fell back below the very important $60.00 per barrel psychological barrier, a further sign of increasing economic worries. Currency markets are in turmoil too, particularly with the Australian and British currency. This just as three major economic indicators are about to drop.
WTI’s fall to around $60.00 calls into question the sustainability of future demand with uncertain and changing global economic conditions. With crude oil prices sinking again, the sentiment in the market isn’t great. Some investors are uneasy, anticipating how this headwind could play a role in our ongoing economic recovery and future energy usage. Analysts say these worries could keep impacting trading activity for the next several days.
The Australian dollar (AUDUSD) saw a sharp recovery against the US dollar (USD), reversing a three-day string of declines. The AUD/USD pair skyrocketed toward the 0.6460 area. It took its place among other resilient risk-associated currencies, holding firm despite the prevailing ongoing market storm. This change is more welcome news for the Australian dollar as investors start to re-position themselves after significant declines in recent weeks.
The British pound (GBP) showed similar signs of recovery, recuperating some of its recent losses. The GBP/USD pair is once again testing a key resistance level around 1.3500. This recent movement indicates that traders are cautiously optimistic about the currency’s potential to regain strength. This move comes as the UK braced itself for a number of big economic announcements on June 2.
Then on June 2, we will get other key economic news from the UK, the trade balance. We’ll get Mortgage Approvals, Lending figures, the final S&P Global Manufacturing PMI, and Nationwide Housing Prices. As such, the reports are usually closely watched for signals on the state of the UK economy and impact traders’ strategies in moving GBP currency.
The USD/JPY pair faced selling pressure and slid to the 144.00 area. That drop came just after its recent ascension, which peaked at 146.30 in the early morning hours of trading. This retreat is a testament to the continued whipsaw shifting of investor risk appetite and a reminder of the ever changing nature of foreign currency exchange markets.
In other precious metals markets, gold prices surged to a new high, retesting $3,330/oz per troy ounce. Much of this uptick has been due to safe-haven buying as investors fled uncertainty in other asset classes. Whenever there is significant market volatility, investors flee to the safe haven asset, gold, and the increased demand sends prices skyrocketing.
Silver prices made a comeback of their own after falling for two days in a row. The metal returned to the $33.50 area per ounce market, a sign of rekindled demand among market participants. Like gold, silver usually gets a boost from safe-haven demand during times of economic uncertainty.
These developments have market participants on high alert. They are getting ready for the coming wave of economic releases and trying to assess how these changes will affect international financial markets.