US Dollar Surges as Oil Prices Soar, Aussie Dollar Takes Hit
The US dollar surged on Thursday, boosted by rising Treasury yields and a hot producer price report. The Australian dollar was heavily affected, falling over 0.8% to its worst day in 56 days as AUD/USD slid under pressure from the surging US dollar.
Crude oil prices rose 6.5% on Thursday, with WTI trading around $103 and Brent now above $107. This increase in crude oil prices has yet to be fully captured by the data, leaving room for further pressure in coming months and setting the scene for consumer prices later today.
The US dollar index enjoyed its best day in nine, forming a bullish pinbar and a three-bar bullish reversal (morning star) on the daily chart. The Australian dollar was the weakest FX major, with AUD/USD falling more than 0.8% to mark its worst day in 56.
Gold fell 1.2%, but for now is holding above last week's low, an invalidation point for a near-term bullish bias outlined earlier this week. The Nasdaq led Wall Street lower with a 1% decline, following the warning signs from weak breadth highlighted in yesterday's article.