U.S dollar extended gains yesterday, partially unwinding a month-long decline as investors weighed chances that interest rates will be forced higher by a roaring U.S economic recovery and awaited upcoming data and policy speeches for clues. Yesterday’s bounce nearly reversed losses sustained on Monday after a disappointing U.S manufacturing survey report, leaving it 1% above a one-month low struck last week. Though April’s headline survey numbers were lower than March's, the U.S recovery remained firmly on track with price pressures rising, while the Federal Reserve appeared to be in no hurry to tighten. Financial conditions are nowhere near the level where the Fed would consider pulling back its support, New York Fed Bank President John Williams said on Monday, despite the economy being set to grow at the fastest rate in decades this year as it rebounds from the crisis caused by the coronavirus pandemic. Commerzbank strategists said U.S. data due for durable goods orders and non-farm payrolls will provide further evidence of the economic recovery. However, as the market expectations are a bit too optimistic according to our experts it might put pressure on the dollar despite principally positive results. The greenback advanced 0.6% versus the Antipodean currencies and 0.3% against the yen, euro, and pound in trade thinned by holidays in China and Japan. The dollar index which measures the dollar’s value against a basket of major rivals climbed 0.4% to 91.34, just shy of a near two-week high. Elsewhere central bank meetings are in focus. The Australian dollar weakened as the country’s central bank sharply upgraded forecasts for the local economy yet still predicted no tightening in its super-loose policy until at least 2024. Sterling dipped marginally to $1.3870 ahead of a Bank of England meeting on Thursday. Analysts reckon the bank might announce a slowdown in its bond-buying program as vaccinations have bolstered Britain’s economy. The Canadian dollar weakened against its U.S counterpart yesterday as the greenback broadly climbed and data showed Canada's trade balance swinging to a surprise deficit in March, with the loonie pulling back from a recent 3-year high. Canada's trade deficit was C$1.1 billion in March, Statistics Canada said.
Euro
The single currency fell yesterday as the U.S dollar extended gains, partially unwinding a month-long decline as investors weighed chances that interest rates will be forced higher by a roaring U.S economic recovery and awaited upcoming data and policy speeches for clues. The Euro has pulled back significantly to reach towards the 1.20 handle. Overall, the EUR/USD traded with a low of 1.1997 and a high of 1.2042 before closing the day around 1.2033 in the New York session.
Yen
The Japanese Yen fell in yesterday’s session as the dollar nursed losses as U.S data showed shortages of basic materials and transport snarls depressed the Institute for Supply Management manufacturing survey by 4.7 points to 64.7, toppling the dollar from a three-week peak on the yen and a two-week high on the euro. Overall, the USD/JPY traded with a low of 107.85 and a high of 108.26 before closing the day around 108.04 in the U.S session.
British Pound
The British Pound dipped against the dollar yesterday with potential volatility expected by analysts ahead of Thursday’s Bank of England meeting and the Scottish parliamentary elections. The BoE is expected by some analysts to announce tapering or a reduction in the pace of its bond purchases at its meeting. Overall, the GBP/USD traded with a low of 1.3883 and a high of 1.3947 before closing the day at 1.3926 in the New York session.
Canadian Dollar
The Canadian Dollar weakened as the greenback broadly climbed and data showed Canada's trade balance swinging to a surprise deficit in March, with the loonie pulling back from a recent 3-year high. Canada's trade deficit was C$1.1 billion in March, Statistics Canada said. Separate data showed that building permits rose by 5.7% in March. Overall, USD/CAD traded with a low of 1.2456 and a high of 1.2650 before closing the day at 1.2494 in the New York session.
Australian Dollar
The Australian Dollar regained some altitude today as surprising strength in local economic data suggested the United States was not the only country where upward pressure on interest rates was mounting. In Australia, the surprise came in approvals to build new homes which blew away forecasts with a rise of 17.4% in March, confirming a major boom was underway Overall, AUD/USD traded with a low of 0.7704 and a high of 0.7764 before closing the day at 0.7760 in the New York session.
Euro-Yen
EUR/JPY is trading above 14, 50, and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 64 and lies above the neutral zone. In general, the pair has lost 0.02%.
Sterling-Yen
Currently, GBP/JPY is trading above 14, 50, and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 56 reading and lies above the neutral zone. On the whole, the pair has lost 0.07%.
Aussie-Yen
Currently, the cross is trading above 14, 50, and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 58 reading and lies above the neutral region. In general, the pair has gained 0.35%.
Euro-Sterling
This cross is currently trading below 14, 50, and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 54 and lies below the neutral region. Overall, the pair has gained 0.07%.
Sterling-Swiss
This cross is trading below 14, 50, and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 45 and lies above the neutral region. In general, the pair has gained 0.07%.
Disclaimer
This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.
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