Strong U.S. Dollar Sinks Crude Oil

July Crude Oil traded lower for a second day on Friday after reaching a multi-month high at $51.67 earlier in the week. The last price was $49.71, down $0.85 or -1.68%. The stronger U.S. Dollar was blamed for fueling the break from 2016 highs. Losses were limited, however, by strong refinery demand and global supply disruptions.

The stronger dollar hurt prices by making fuel imports more expensive for foreign countries. However, strong overall demand for oil from domestic refineries, as well as supply disruptions in Nigeria, were helping the sell-off from accelerating.

Despite the stronger dollar, August Comex Gold prices recovered from earlier weakness to trade at $1278.00, up $6.10 or +0.48%. The market was trading near a three-week high and was on track for a second straight weekly rise.

Demand for safe haven assets was the catalyst behind the rally on Friday. This trend began last week with the release of the bearish U.S. Non-Farm Payrolls report and gained traction after dovish comments from Fed Chair Janet Yellen earlier in the week, dampened expectations of an imminent rate hike.

Worries that Britain may leave the Euro Zone shortly after the referendum on June 23 is spreading across Europe, sending investors into the safe haven Japanese Yen and even the Swiss Franc.

The USD/JPY lost ground on Friday, finishing at 106.854, down 0.266 or -0.25%, after risk-off sentiment across major markets drove down emerging market currencies and send yields on Japanese and German 10-year bonds to record lows. The safe haven Swiss Franc gained 0.2 percent to trade at 1.0885 francs per euro, near its strongest level since April 14.

Sellers continued to hit the EUR/USD on Friday as German Bund yields neared 0.00%. The Euro was at 1.1291 against the dollar, down 0.0024 or -0.21%.

The GBP/USD plunged on Friday as more investors became convinced that British citizens will vote for the UK to leave the Euro Zone. The Sterling fell nearly 1.00% to 1.4324, down -0.0131

In other news, U.S. Preliminary University of Michigan Consumer Sentiment came in steady at 94.3, slightly above the 94.1 estimate. Later today, the Federal Budget will be released. It is expected to come in at -56.2 billion.

With the German 10-year Bund yield hitting a fresh all-time low of 0.011 percent Friday morning ET and the Japanese 10-year yield hitting a record negative low of minus 0.13 percent, European stock traders got a little spooked and equities plunged. U.S. indices followed Europe lower, led by weaker financial sector stocks. At the midday, June E-mini Dow Jones Industrial Average futures were down 136 points. The June E-mini S&P 500 Index futures contract lost 17.75 points, or -0.84% to trade at 2096.50.