Forex Today: Antipodeans rally with Oil amid cautious optimism; US Q1 GDP, FOMC eyed
Optimism about progress on opening economies globally whetted risk sentiment in Wednesday’s Asian trading but investors remained cautious ahead of the key US Q1 GDP and FOMC decision.
Also, the US-China conflict over Beijing’s coronavirus response and awful US Consumer Confidence data kept the traders on the edge. Asian markets were a mixed bag, with the Japanese stocks lagging while the US equity futures jumped nearly 1.50%. The US Treasury yields, however, remained soggy, with the US dollar downed once again amid a cautious optimistic environment.
Crude oil prices extended Tuesday’s bounce, with WTI having briefly regained $14 mark. Gold prices also rose after three-day declines, in the wake of the dollar repositioning ahead of the key event risks.
On the currency front, USD/JPY continued to tack the dollar trend and fell to a new six-week low near 106.50. The Antipodeans were the top performers across the fx board, as economic re-openings down under buoyed the sentiment. AUD/USD reached fresh seven-week highs near 0.6540, also helped by upbeat Australian Q1 CPI figures. The Kiwi also followed suit and jumped back above 0.6100. USD/CAD faced rejection at 1.4000 and dropped below 1.3950, as the Canadian dollar was rescued by the oil-price rebound.
Among the European currencies, EUR/USD consolidated the Asian bounce to 1.0855 while the cable veered towards 1.2500, having added 0.50% on the day.
Main topics in Asia
Australian Treasurer Frydenberg: Australia will not bow to economic coercion
NZ Trade Balance: A monthly trade surplus of NZ$672.00 million in March
Australia Q1 RBA trimmed mean CPI +0.5 pct QoQ vs poll +0.4 pct
Italy’s Gualtieri: Economic fundamentals are solid
Oil price crash pushes Saudi's FX reserves to 9-year low
Australian PM Morrison: Want a global coronavirus investigation
China parliament to hold annual meeting starting May 22 – Xinhua
Moody’s slashes near-term oil price forecasts
Gold Price Analysis: Currency debasement fears could push yellow metal to all-time highs
Key focus ahead
We have a busy EUR macro calendar today, kicking-off with the German Import Price Index data at 0600 GMT. Later in the European session, a slew of Eurozone Business Sentiment and Confidence numbers will be reported at 0900 GMT, keeping the EUR, GBP traders somewhat busy. Brexit-related headlines amid uncertainty over the deadline and post-transition talks will also grab some attention for the pound traders.
Markets await the monetary policy decisions from both the FOMC and ECB due later this week, in the wake of the coronavirus pandemic.
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