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Forex Morning Overview: 12 May 2017

U.S. stocks fell on Thursday, along with the U.S. dollar as political uncertainty in the United States and weak retail sector earnings reports sent investors in search of safer investments like gold and the Japanese yen. Investors were concerned about developments relating to the firing of FBI Director James Comey late on Tuesday by U.S. President Donald Trump.

U.S. stocks trimmed losses, but the benchmark S&P 500 still posted its largest one-day percentage fall in four weeks. Investors will be watching April retail sales data due out on Friday for signs of whether consumers are shifting their spending away from department stores or just aren't spending.

Oil prices rose 1 percent, extending Wednesday's 3 percent gains on the back of the biggest one-week drop in U.S. inventories so far this year and a decision by Iraq and Algeria to join Saudi Arabia in supporting an extension to supply cuts by the Organization of the Petroleum Exporting Countries.

Gold prices rose 0.47 percent to $1,224 per ounce, as the U.S. dollar took a break from recent strength and U.S. and European equities declined.

Data released Thursday showed first-time claims for U.S. unemployment benefits fell 2,000 to a seasonally adjusted 236,000 in the week ended May 6, while the number of people receiving continuing claims fell to the lowest level in more than 28½ years.

Investors have been looking to U.S. economic data for hints on the Federal Reserve’s next move on interest rates. The market widely expects the central bank to raise rates at its meeting next month.

Bank of England policymakers kept interest rates unchanged and indicated that they were unlikely to rise until late 2019.  Sterling fell to a one-week low of $1.2847. The dollar fell 0.4 percent against the Japanese yen after four days of gains.

Earlier, the New Zealand dollar sank as much as 1.5 percent after the country's central bank kept a neutral bias, warning markets they were reading the outlook wrongly and expressing approval of the currency's declines this year.

Fi24h Editorial Board
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