- The EUR/USD recorded losses in April of 4.75%, the biggest since 2015.
- Though Wall Street finished with substantial losses, a sudden shift in sentiment failed to boost the greenback vs. the euro.
- US Core PCE down ticked, but headline inflation rose to 6.6%, as the FOMC will hold its May monetary policy meeting
The EUR/USD recovers some ground after being battered in the week, so far down 2.30%, but the hefty monthly losses amount to 4.68%, the most relevant since January 2015. At the time of writing, the EUR/USD is trading at 1.0541.
Sentiment turned sour late in the New York session
The week finished with dismal market sentiment. US equities recorded hefty losses, between 2.77% and 4.17%. China’s coronavirus outbreak which has lasted for the last couple of weeks threatens to disrupt supply chains. The US central bank’s increasing rate hikes to tackle inflation and the Ukraine-Russia conflict, further entering its third month, were the drivers of the last trading day of the month.
Data-wise, the US economic docket featured inflationary readings for March. The Fed’s favorite measure of inflation, the Core Personal Consumer Expenditures (PCE), rose by 5.2% y/y lower than expectations, indicating that inflation excluding volatile items is peaking. The data further strengthens the case for a Federal Reserve rate hike in the next week, as the US central bank chief Jerome Powell expressed during the month that a 50-bps increase is “on the table.”
Analysts at TD Securities expressed that “we now expect the Fed to deliver three consecutive 50bp hikes (in May, June, and July) and subsequently hike rates by 25bp per meeting until they reach a terminal funds rate of 3.25% by March 2023.”
The Eurozone docket featured inflationary figures. France’s inflation rose above expectations and the previous reading, to 4.8% y/y, while French HICP reached 5.4%. Regarding the whole Eurozone, general inflation climbed to 7.5%. Additionally, GDP for Q1 rose to 5%, aligned with estimations.
Next week’s economic docket
In the week ahead, the Eurozone and US dockets would be packed. The Eurozone docket would feature a raft of Retail Sales, PMIs, Industrial Production, and Unemployment rates from Germany, Italy, Spain, France, and the block.
On the US front, the docket would reveal S%P Global PMIs, ISM PMIs, the Federal Reserve monetary policy meeting, ADP Employment Change, and the Nonfarm Payrolls report.
Key Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD faces potential extra gains near term
Further weakness in the US Dollar allowed AUD/USD to rapidly forget Friday’s pullback and resume the uptrend well north of 0.6700 the figure amidst quite an auspicious start to the new trading week.
EUR/USD now retargets the 1.1150 region
EUR/USD managed to regain upside impulse and break above the 1.1100 barrier to print new multi-day peaks on the back of increasing downward pressure in the Greenback ahead of the key FOMC meeting.
Gold consolidates gains near fresh all-time highs
Gold trades in a narrow range above $2,580 after touching a new record-high near $2,590 earlier in the day. The benchmark 10-year US Treasury bond yield holds above 3.6% ahead of the Fed meeting and makes it difficult for XAU/USD to find direction.
MicroStrategy plans to buy additional Bitcoin following $700 million convertible notes sale
MicroStrategy plans to increase its Bitcoin holdings after announcing a $700 million convertible senior notes offering on Monday. The announcement follows its $1.11 billion Bitcoin purchase a few days ago.
Five Fundamentals for the week: Fed overtowers pivotal week for Gold, stocks and the US Dollar Premium
The Fed's first rate cut stands out as economic uncertainty mounts. US Retail Sales and Jobless Claims are of high interest. Rate decisions by central banks in the UK and Japan are also pivotal.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.