US {services} raise doubts about economic recovery

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US {services} raise doubts about economic recovery

Anxiety in the markets and a trend for havens


Tuesday – 17 Dhul-Hijjah 1442 AH – 27 July 2021 AD Issue No. [
15582]


Investors in the markets focused on safe havens, with reports raising doubts about the recovery pattern (Reuters)

Washington: Asharq Al-Awsat.

Investment bank Goldman Sachs on Monday cut its forecast for US economic growth for the remainder of the year, citing a slower recovery in the services sector.
The US investment bank revised its growth forecasts for the third and fourth quarters by one percentage point, to 8.5 percent and 5.0 percent, respectively. With this adjustment, the bank’s forecast for the growth of the world’s largest economy for the whole of 2021 is reduced to 6.6 percent.
The expectations of “Goldman Sachs” add to the widespread anxiety factors around the world, as gold prices rose on Monday, supported by the decline in US bond yields, and fears about the increase in infections with the mutated strain “Delta”, while investors are looking forward to the meeting of the Open Market Committee of the US Federal Reserve, which is being held this week. .
And gold rose in spot transactions 0.3 percent to $ 1806.80 an ounce by 06:49 GMT. And US gold futures rose 0.3 percent to $ 1806.70.
Stephen Innes, managing partner at SBI Asset Management, said: “There is no guarantee that we will get rid of this pandemic (Covid-19), and this will continue to maintain demand for the safe haven that supports gold, simply because it may keep central banks on side of the tendency to monetary easing. Ines pointed out that it is unlikely that investors will have large positions in gold unless the “Covid-19” situation worsens a lot. And the increase in “Covid-19” infections continued at the weekend, while a number of countries in Asia and Europe were struggling to control the outbreak of the most contagious mutated “delta” strain. The benchmark 10-year Treasury yields have fallen, reducing the opportunity cost of holding the non-yielding yellow metal.
Meanwhile, Asian stocks fell to their lowest levels since the beginning of this year, as concerns about tightening regulations led to a decline in Chinese stocks, pushing investors towards safe haven assets, such as gold.
Investors are watching the US central bank’s meeting on Tuesday and Wednesday. While it appears that no change in policy is expected, investors will be looking for indications of when the Bank may begin to ease its accommodative monetary policies.
The dollar index has consolidated near its 3-1/2-month peak reached last week, reducing the attractiveness of gold. For other precious metals, silver gained 0.4 percent to $ 25.25 an ounce, palladium fell 0.4 percent to $ 2662.71, and platinum rose 0.3 percent to $ 1064.23.
The safe-haven yen and the US dollar began the week to rise against more risky currencies, such as the Australian dollar, as the rise in “Covid-19” injuries, and the decline of stocks in Asia, led to a state of caution before the Federal Reserve meeting.
The yen rose about 0.5 percent to 81.08 against the Australian dollar on Monday, while the US currency gained 0.2 percent to $ 0.7351 against its Australian counterpart, approaching an almost 8-week high reached last week at $ 0.72895.
Against the dollar, the Japanese currency added 0.2 percent to 110.32 yen, thanks to lower US Treasury yields. The euro rose 0.1 percent to $1.17795, to settle after falling last week to its lowest level since early April at $1.1752. The dollar index, which measures the performance of the US currency against 6 major currencies, fell slightly to 92.833 due to the pressure of the euro and the yen, but it remains close to the peak of 3 and a half months that it recorded last week at 93.194. The index gained about 4 percent from its last low level on May 25, as the improvement in the US economy boosted expectations that the Federal Reserve would start reducing asset purchases early this year.
Cryptocurrencies received a boost after London’s City AM newspaper, citing an unnamed internal source, said Amazon was considering accepting bitcoin payments by the end of the year. The report followed a tweet in which Twitter chief Jack Dorsey said on Friday that digital currency is a “big part” of the social media company’s future.
Bitcoin extended gains from near $29,000 last week, to reach the $40,000 threshold today, for the first time since mid-June. And recorded in the latest trading, an increase of 8.5 percent to 38,455 dollars. Its smaller rival, Ether, rose in the latest trading 6.8 percent to $2,344.08, recovering from a low of $1,717.17 recorded last week.


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