Vantage FX Market Outlook for 20th May 2021 #Risk sentiment i | VANTAGE FX SIGNALS

Vantage FX Market Outlook for 20th May 2021

#Risk sentiment is rather risk off early Thursday. Asian stocks were steady early Thursday as investors weighed Federal Reserve minutes that flagged the possibility of a debate on scaling back asset purchases. Treasury yields and the dollar held an advance. Minutes indicated some Fed officials may be open “at some point” to discussing adjustments to the face of massive bond purchases if the U.S. economy keeps progressing rapidly. A bout of volatility swept over cryptocurrencies, with Bitcoin posting a same-day plunge and rally of about 30%. The largest token and other virtual currencies like Ether are nursing losses from a recent selloff. Cryptocurrency-exposed shares including Coinbase Global Inc slid.

#DXY The dollar is expected to turn slightly bullish as the Fed confirms about plans to deal with inflation. Fall in stocks and increase in treasury yield could make investors worry about the Fed tightening monetary policy, we could possibly see an increase in the dollar. Adding to the bearish tone were the last minutes from April Federal Reserve meeting which showed that some policymakers are already comfortable discussing a tapering plan if the US economy continues to pick up strongly and inflationary pressures persist.

#Gold Gold is now trading around the $1870 mark, after hitting a high at $1890 on Wednesday. This was due to a strengthening dollar and rising treasury yields that weighed down on the price of gold. Several Fed officials also struck a more hawkish tone in its monetary policy update.Gold prices could edge higher, buoyed by rising concerns of rising inflationary pressure with a burst in economic activity, as the precious metal is often seen as a hedge against inflation.
#CrudeOil #Oil Oil prices continued its drop erasing all the gains it has made over last week. This came as the markets started feeling jittery as surging covid-19 cases in Asia is seen to negatively affect demand. Further US inflation fears could also prompt the Fed to slow economic growth with rate hikes and this would be a double blow to the demand recovery of oil. At the start of the Asian trading session, WTI opened lower by about 1%, whilst Brent dropped by 0.7%.