The positive shift seen in risk mood made it difficult for the US Dollar to find demand on Monday and the US Dollar Index (DXY) snapped a two-day winning streak. Early Tuesday, the DXY holds its ground as markets await April Retail Sales data from the US. In the European session, Eurostat will release the Gross Domestic Product growth data for the first quarter and ZEW Survey – Economic Sentiment for the Euro area and Germany will also be looked upon for fresh impetus. Market participants will continue to pay close attention to comments from central bank officials.

US stock index futures trade modestly lower on the day and the benchmark 10-year US Treasury bond yield stays in negative territory below 3.5%. Following the 0.6% decline recorded in March, Retail Sales in the US are forecast to rise 0.7% in April. US President Joe Biden will meet with Republican House of Representatives Speaker Kevin McCarthy and three other top congressional leaders at 1900 GMT for the next round of debt limit negotiations.

US April Retail Sales forecast: US Dollar unlikely to find reprieve.

Early Tuesday, the data published by the UK’s Office for National Statistics (ONS) revealed that the ILO Unemployment Rate edged higher to 3.9% in the three months to March. This reading came in higher than the market expectation of 3.8%. In the same period, wage inflation, as measured by Average Earnings Including Bonus, held steady at 5.8% but surpassed analysts’ estimate of 5.1% by a wide margin. Pound Sterling came under heavy selling pressure after the mixed jobs report and GBP/USD dropped below 1.2500.

EUR/USD registered small gains on Monday but closed below 1.0900. The pair stays relatively quiet early Tuesday. Citing Eurosystem sources, MNI reported on Monday that the European Central Bank (ECB) was most likely to raise key rates once or twice more in this tightening cycle.

Supported by rising US Treasury bond yields, USD/JPY climbed to its highest level in over 10 days above 136.00 on Monday. The pair seems to have gone into a consolidation phase early Tuesday and was last seen trading a few pips below 136.00.

USD/CAD fell sharply on Monday and closed below 1.3500 as rising crude oil prices helped the commodity-sensitive Canadian Dollar gather strength. Later in the day, Statistics Canada will publish the Consumer Price Index data for April, which is forecast to rise 4.1%, compared to 4.3% in March.

During the Asian trading hours, the data from Australia revealed that the Westpac Consumer Confidence Index worsened to -7.9% in May from 9.4% in March. AUD/USD stays under modest bearish pressure on Tuesday and trades in negative territory below 0.6700 after having failed to stabilize above that level on Monday.

Following a quiet Asian session, Gold price turned south in the European morning and dropped toward $2,000.

Bitcoin rose toward $28,000 on Monday but lost its bullish momentum before testing that level. BTC/USD stays on the back foot early Tuesday and trades in negative territory near $27,000. Ethereum posted small gains on Monday. In the European morning, ETH/USD fluctuates in a tight channel slightly above $1,800.

The action in financial markets remain subdued at the beginning of the week and the US Dollar Index (DXY) consolidates last week’s gains, whilc holding above 102.50. May Industrial Production data from the Eurozone will be featured in the European economic docket. Later in the day, the Federal Reserve Bank of New York will release the Empire State Manufacturing Index. In the early trading hours of the Asian session on Tuesday, Industrial Production and Retail Sales data from China will be looked upon for fresh impetus.

Late Friday, the University of Michigan reported that the Consumer Confidence Index dropped to 57.7 (preliminary) in May from 63.5 in April. Furthermore, the one-year inflation expectation component edged lower to 4.5% from 4.6% but the 5-year inflation expectation rose from 3.0% to 3.2%, the highest reading since 2011. Supported by the risk-averse market environment, the DXY gained nearly 1.5% last week and registered its highest weekly close since late March. Early Monday, US stock index futures are up around 0.3% and the benchmark 10-year US Treasury bond yield hold steady slightly below 3.5%.

Earlier in the day, US President Joe Biden reportedly said that he expects to meet with Congressional leaders for the next round of debt limit negotiations on Tuesday.

EUR/USD broke below 1.0900 on Friday and lost nearly 100 pips on the day. The pair stages a technical correction and clings to small gains above 1.0850 early Monday.

GBP/USD lost nearly 200 pips last week and snapped a three-week winning streak. Although the pair edges higher in the European morning, it continues to trade below 1.2500.

USD/JPY gathered bullish momentum in the Asian session and touched its highest level in over 10 days at 136.26 before retreating toward 136.00 into the European session.

Gold price closed the previous week virtually unchanged as buyers managed to defend the key level on Friday. XAU/USD holds its ground early Monday and trades in positive territory near $2,020.

Ahead of Tuesday’s key data releases from China, AUD/USD stays bullish early Monday and continues to stretch higher toward 0.6700. Similarly, NZD/USD was last seen rising 0.5% on the day above 0.6200.

Following a quiet weekend, Bitcoin has gathered recovery momentum and advanced to the $24,500 area early Monday. Ethereum is up nearly 2% in the European morning, trading above $1,800.

Following the slide seen with the initial reaction to April inflation data on Wednesday, the US Dollar Index stages a rebound early Thursday. The Bank of England (BoE) will announce monetary policy decisions later in the day and Governor Andrew Bailey will comment on the policy outlook and respond to questions from the press. April Producer Price Index (PPI) and weekly Initial Jobless Claims will be featured in the US economic docket.

Bank of England Preview: Bailey to break Pound’s rally with reluctance to raise rates further.

The US Bureau of Labor Statistics announced on Wednesday that annual inflation in the US, as measured by the change in the Consumer Price Index (CPI), edged lower to 4.9% in April from 5% in March, compared to the market expectation of 5%. US Treasury bond yields turned south after inflation data and the benchmark 10-year yield snapped a four-day winning streak and lost more than 2% on the day. In turn, the US Dollar Index closed in negative territory. Mixed market mood, however, helped the USD stay resilient against its rivals in the late American session.

During the Asian trading hours on Thursday, monthly CPI in China decreased 0.1% in April, brining the rate of annual change down to 0.1% from 0.7% in March. Meanwhile, the data from Australia revealed that the Consumer Inflation Expectations climbed to 5% in May from 4.6% in April, matching the market expectation. AUD/USD stays on the back foot early Thursday and trades near 0.6750.

The BoE is widely expected to raise its policy rate by 25 basis points to 4.5% following the May policy meeting. The BoE will also release its revised projections for growth and inflation. Market participants will pay close attention to the vote split and comments from Bailey regarding additional rate increase in the near future. GBP/USD closed virtually unchanged for the second straight day on Wednesday and trades in a tight channel at around 1.2600 ahead of the event.

Bank of England Preview: A risk event for the GBP/USD rally.

EUR/USD registered small daily gains on Wednesday but failed to reclaim 1.1000. As market participants assess the latest remarks from European Central Bank (ECB) officials, the pair stays in negative territory at around 1.0950.

Gold price spiked to the $2,050 area after US inflation data but failed to preserve its bullish momentum. XAU/USD stays indecisive near $2,030 early Thursday.

Pressured by falling US yields, USD/JPY lost nearly 100 pips on Wednesday before going into a consolidation phase slightly above 134.00 early Thursday. The Bank of Japan’s Summary of Opinions for April meeting reiterated that they must continue the current easy policy given uncertainty over global outlook.

Bitcoin fluctuated in a wide range on Wednesday but ended up closing the day flat below $28,000. BTC/USD edges lower toward $27,500 early Thursday. Ethereum gained traction in the early American session but failed to cling to its recovery gains on Wednesday. In the European morning, ETH/USD continues to stretch lower toward $1,800.

The US Dollar Index, which tracks the US Dollar’s (USD) performance against a basket of six major currencies, seems to have gone into a consolidation phase after having closed the first two days of the week in positive territory. Although markets stay relatively quiet early Wednesday, April Consumer Price Index (CPI) data from the US should ramp up volatility in the second half of the day.

Wall Street’s main indexes closed in negative territory on Tuesday amid a lack of progress in debt ceiling negotiations. US stock index futures trade modestly higher in the European morning on Wednesday and the benchmark 10-year US Treasury bond yield fluctuates slightly above 3.5%.

EUR/USD extended its downward correction on Tuesday and closed well below 1.1000. With hawkish comments from European Central Bank (ECB) governors helping the Euro hold its ground, the pair edges higher early Wednesday but remains below 1.1000. The data from Germany showed earlier in the day that the annual CPI rose 7.2% in April, matching the flash estimate and the market expectation.

GBP/USD’s losses remained limited despite risk aversion on Tuesday as markets refrain from betting Pound Sterling weakness ahead of the Bank of England’s policy announcements on Thursday. The pair continues to fluctuate above 1.2600 early Wednesday.

USD/JPY registered small gains on Tuesday and trades above 135.00 in the European morning. The data from Japan revealed that the Leading Economic Index declined to 97.5 in March from 98 in February. Meanwhile, Bank of Japan (BoJ) Governor Kazuo Ueda said on Wednesday that the BoJ’s ETF buying was helping underpin consumption and capex by preventing volatile market moves from hurting public confidence.

Following a quiet European session, Gold price edged higher in the second half of the day on Tuesday and closed in positive territory, supported by safe-haven flows. XAU/USD stays relatively calm on Wednesday and moves up and down in a tight channel at around $2,030.

Bitcoin struggled to find direction on Tuesday and closed the day virtually unchanged above $27,500. BTC/USD stays under modest bearish pressure in the European morning. Ethereum registered small losses on Tuesday and continues to trade within a touching distance of $1,800 early Wednesday.

The US Dollar manages to hold its ground on the second trading day of the week with the US Dollar Index edging higher after having closed modestly higher on Tuesday. The US economic docket will feature the NFIB Business Optimism Index and the IBD/TIPP Economic Optimism Index later in the day. Market participants will continue to pay close attention to comments from central bank officials in the absence of high-tier data releases.

The cautious market stance, as reflected by the mixed performance in Wall Street’s main indexes, and the rebound seen in the US Treasury bond yields helped the US Dollar stay resilient against its major rivals on Monday. In the late American session, the US Federal Reserve’s (Fed) Senior Loan Officer Opinion Survey showed that  survey respondents reported, on balance, tighter standards and weaker demand for commercial and industrial (C&I) loans to large and middle-market firms, as well as small firms, over the first quarter.

In the Asian trading hours on Tuesday, the data from China revealed that the trade surplus widened to $90.2 billion in April from $88.19 billion in March. This reading surpassed the market expectation of $71.6 billion by a wide margin. Meanwhile, Retail Sales in Australia contracted by 0.6% in the first quarter, compared to analysts’ estimate for a decrease of 0.4%. Following these data releases, AUD/USD stays on the back foot and trades in negative territory at around 0.6750 after having reached its highest since mid-April above 0.6800.

Following a consolidation phase near 1.1000 in the Asian session, EUR/USD started to edge lower in the European morning. European Central Bank (ECB) policymaker Martins Kazaks said on Tuesday that the rate-hiking may not be finished in July but this comment failed to help the Euro gather strength.

GBP/USD registered small losses on Monday and retreated to the 1.2600 area early Tuesday. Following a three-day weekend, the UK’s FTSE 100 Index opened marginally lower.

Gold price struggled to gather bullish momentum amid rising US T-bond yields and finished the day virtually unchanged on Monday. Early Tuesday, XAU/USD continues to fluctuate in a tight range at around $2,020.

USD/JPY extends its sideways grind near 135.00 on Tuesday. Bank of Japan (BoJ) Governor Kazuo Ueda said earlier in the day that the impact of recent US and European bank failures on Japan’s financial system was likely limited.

Bitcoin lost nearly 3% and broke below $28,000 on Monday. BTC/USD stays relatively quiet early Tuesday and trades above $27,500. Ethereum closed in negative territory for the third straight day and came within a touching distance of $1,800 before going into a consolidation phase on Tuesday.

Fueled by the decisive rebound seen in banking stocks on Friday, Wall Street’s main indexes turned north and ended the week on a bullish note. Early Monday, markets seem to have turned cautious as attention shifts to the US Federal Reserve’s Senior Loan Officer Opinion Survey, which could provide fresh clues regarding how tight financial conditions are. Sentix Investor Confidence data for May will be featured in the European docket and investors will also keep an eye comments from central bank officials.

On Friday, the US Bureau of Labor Statistics reported that Nonfarm Payrolls rose by 253,000 in April, surpassing the market expectation of 179,000 by a wide margin. On a negative note, March’s 236,000 increase got revised lower to 165,000. The Unemployment Rate ticked down to 3.4% in the same period and the annual wage inflation edged higher to 4.4% from 4.3%. Although the initial reaction helped the US Dollar find some demand, the risk-positive market environment caused the US Dollar Index to erase its recovery gains.

EUR/USD closed the previous week virtually unchanged slightly above 1.1000. The pair stretches higher toward 1.1050 in the European morning on Monday.

GBP/USD gathered bullish momentum and advanced to its strongest level in nearly a year above 1.2650 late Friday. The pair stays relatively quiet early Monday and fluctuates at around that level.

Following the sharp decline witnessed in the first half of the previous week, USD/JPY closed the last two days in positive territory. The pair, however, struggled to stabilize above 135.00 and retreated below that level in the Asian trading hours on Monday. Earlier in the day, the data from Japan revealed that the Jibun Bank Services PMI improved to 55.4 in April, compared to the market expectation of 54.9.

After spiking to above $2,070 on Thursday, Gold price staged a deep technical correction on Friday as the benchmark 10-year US Treasury bond yield retraced a portion of its weekly decline. Nevertheless, XAU/USD holds comfortably above $2,000 after having failed to clear that level several times since mid-April.

USD/CAD lost nearly 200 pips on Friday amid a strong rebound in crude oil prices and the upbeat April jobs report from Canada. The pair was last seen trading in negative territory at around 1.3350. Meanwhile, the barrel of West Texas Intermediate is already up 1% on the day slightly above $72 after having gained 4% on Friday.

AUD/USD trades at its highest level in nearly a month and closes in on 0.6800 early Monday after having registered gains every day last week. First-quarter Retail Sales data from Australia will be released in the Asian session on Tuesday. Trade Balance data from China will also be watched closely by market participants.

Bitcoin reversed its direction following Friday’s rebound and closed in negative territory on Saturday and Sunday. BTC/USD stays on the back foot and declined toward $28,000 early Monday. Ethereum lost nearly 6% over the weekend and broke below $1,900 before going into a consolidation phase to start the new week.

Investors remain on edge on the last trading day of the week as they keep a close eye on the performance of regional bank stocks in the US while awaiting the April jobs report. The European economic docket will feature Retail Sales data for April and Statistics Canada will release the labor market data later in the day. With the Federal Reserve’s (Fed) blackout period ending on Thursday, comments from policymakers will be watched by market participants as well.

Safe-haven flows dominated the financial markets on Thursday, helping the US Dollar erase some of the losses it suffered in the Fed aftermath. PacWest Bancorp shares hit a record low after the opening bell on Thursday after the lender announced that it was in talks with potential partners about strategic asset sales. Meanwhile, the Financial Times reported that Western Alliance was also exploring similar options, triggering a selloff in other regional bank stocks as well. Later in the day, Western Alliance shares rebounded after the bank denied the report, calling it ‘shameful’. Early Friday, US stock index futures are up between 0.2% and 0.4%.

Nonfarm Payrolls (NFP) in the US are forecast to rise by 179,000 in April following the 236,000 increase recorded in March. The Unemployment Rate is expected to remain unchanged at 3.5% and the annual wage inflation is seen holding steady at 4.2%.

EUR/USD declined below 1.1000 on Thursday but managed to stage a rebound. The European Central Bank (ECB) raised its key rates by 25 basis points as expected. During the press conference, ECB President Christine Lagarde clarified that they were not going to pause the policy tightening, adding that they had “more ground to cover.” Although Lagarde’s hawkish comments helped the Euro find demand, the risk-averse market environment limited the pair’s upside. In the early European morning on Friday, EUR/USD was trading modestly higher on the day slightly below 1.1050. Meanwhile, the data from Germany showed that Factory Orders slumped by 10.7% on a monthly basis in March, compared to the market expectation for a decrease of 2.2%.

GBP/USD closed modestly higher on Thursday as the sharp decline seen in EUR/GBP helped Pound Sterling stay resilient against the USD. The pair continues to stretch higher early Friday and was last seen trading at its highest level in nearly a year above 1.2600.

USD/JPY fell for the third straight day on Thursday before stabilizing slightly above 134.00 early Friday. Earlier in the day, a magnitude 6.3 earthquake hit Japan’s Ishikawa Prefecture. This development, however, doesn’t seem to be having an impact on the pair’s action.

Gold shined as the go-to safe-haven asset on Thursday and climbed to $2,060 during the American trading hours. XAU/USD retreated below $2,050 early Friday but clings to impressive weekly gains.

Bank of Canada (BoC) Governor Tiff Macklem said in a prepared speech at the Toronto Region Board of Trade that if they start to see signs that inflation is likely to get stuck materially above their 2% target, they are prepared to raise interest rates further. These hawkish comments and a late rebound seen in crude oil prices helped the CAD outperform the USD on Thursday and USD/CAD lost more than 100 pips. The pair trades in negative territory near 1.3500 early Friday. The Unemployment Rate in Canada is forecast to tick up to 5.1% in April from 5% in March with a +20K in Net Change in Employment.

Bitcoin closed modestly lower on Thursday but started to edge higher early Friday. BTC/USD was last seen rising more than 1% on the day near $29,200. Ethereum retreated on Thursday but returned to the $1,900 area ahead of the weekend.

The US Dollar stays under persistent selling pressure following the US Federal Reserve’s (Fed) rate decision and Chairman Jerome Powell’s comments on the policy outlook. The European Central Bank (ECB) will announce its policy decisions later in the day and the US economic docket will feature the weekly Initial Jobless Claims report alongside March Trade Balance and Unit Labor Costs data for the first quarter.

The Fed raised its policy rate by 25 basis points (bps) to the range of 5-5.25% as expected after its May policy meeting. In the policy statement, the Fed stopped using the language saying that “some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.” The dovish change in the Fed’s tone triggered a sharp decline in the US Treasury bond yields and caused the US Dollar Index (DXY) to extend its daily slide late Wednesday.

Although FOMC Chairman Jerome Powell refrained from confirming a pause in the tightening cycle in June and said that they were not forecasting a rate cut this year, these comments did little to nothing to change the market perception. After having lost 0.7% on Wednesday, the DXY continues to edge lower early Thursday and stays within a touching distance of 101.00.

The ECB is forecast to raise its key rates by 25 bps later in the day. Investors will want to see whether the ECB will confirm one more rate hike at the next meeting. Ahead of this important event, EUR/USD continues to stretch higher toward 1.1100 in the European morning.

GBP/USD gained 100 pips on Wednesday and erased Monday’s and Tuesday’s losses. The pair clings to small daily gains early Thursday and trades slightly below 1.2600.

In the early Asian session, Gold price reached an all-time high of $2,080 before retreating below $2,050 by the European morning. The benchmark 10-year US Treasury bond yield stages a modest rebound after having lost nearly 7% in the last two days, limiting XAU/USD’s upside for the time being.

USD/JPY fell nearly 200 pips on Wednesday and retraced the majority of the bullish rally witnessed toward the end of the previous week. The pair stays relatively quiet early Thursday and fluctuate near 134.50.

Bitcoin continues to edge higher after having registered modest gains following the Fed event late Wednesday. At the time of press, BTC/USD was trading near $29,200. Ethereum gained nearly 2% for the second straight day on Wednesday and seems to have stabilized slightly above $1,900 early Thursday.