Forex Today: Dollar the strongest as risk aversion rules

FXStreet Team FXStreet

Here is what you need to know on Monday, April 6th:

Risk aversion leads the way. The coronavirus pandemic continues to take its toll on economic developments, with the US losing 701,000 jobs’ positions in March, much worse than anticipated. The unemployment rate in the country jumped 1 full digit from 3.4% to 4.4%. The final readings of March Services PMI for most major economies suffered downward revisions to record lows.
The US Federal Reserve announced on Friday it would dial back the daily pace of bond-buying to $50 billion a day starting this week, down from the initial buying of $75 billion, a positive sign toward some financial stability.
The coronavirus continues to spread. The US is the epicenter of the pandemic, with over 310,000 cases reported from a global total of 1.22 million. The death toll is at 66,500. At some point, these numbers will become irrelevant, amid the uneven proportion of the tested population in each nation.
The American currency appreciated against its major rivals last week, as it’s still the preferred safe-haven, followed by gold. The US ISM Non-Manufacturing PMI was upbeat in March, printing at 52.5, backing the dollar’s momentum ahead of the close.
The shared currency remains the weakest, while the Pound is the most resilient to the dollar’s demand. The EUR/USD pair is under pressure around 1.0800 while GBP/USD trades below the 1.2300 threshold, at risk of extending its slump.
Commodity-linked currencies ended the week with losses, despite oil and gold settled at weekly highs. Spot gold closed the week at $1,616.20 a troy ounce, while WTI ended at $28.50 a barrel, a two-week high.
Cryptocurrencies spent the weekend consolidating in tight ranges near their recent multi-week highs.

Author

FXStreet Team

FXStreet

EUR/USD climbs to two-week highs beyond 1.1900

EUR/USD is keeping its foot on the gas at the start of the week, reclaiming the 1.1900 barrier and above on Monday. The US Dollar remains on the back foot, with traders reluctant to step in ahead of Wednesday’s key January jobs report, allowing the pair to extend its upward grind for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold treads water around $5,000

Gold is trading in an inconclusive fashion around the key $5,000 mark on Monday week. Support is coming from fresh signs of further buying from the PBoC, while expectations that the Fed could turn more dovish, alongside concerns over its independence, keep the demand for the precious metal running.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.