What you need to know on Monday, April 26:
The dollar fell on Friday amid prevalent risk appetite. Wall Street rallied following upbeat Markit flash PMIs for the EU and the US, with most indexes reaching record levels, boosting hopes for a soon-to-come economic recovery after the pandemic slump.
The EUR/USD pair settled near 1.2100, as the shared currency shrugged off a cautious ECB, also boosted by hopes that the immunization campaign will pick up in the Union in the next couple of months.
GBP/USD was unable to advance beyond 1.3900, as the pound suffers from Brexit jitters. Mounting tensions with the EU amid the absence of post-Brexit progress and failure to apply the Northern Ireland Protocol as it was initially tough, limited demand for the British currency.
The USD/JPY pair maintained the bearish tone and traded as low as 107.50, undermined by the soft tone of US government bond yields.
Commodity-linked currencies were underpinned by firmer stocks but remained within familiar levels as gold and oil failed to impress. The bright metal fell for a second consecutive day, finishing the week at $ 1,770 a troy ounce. WTI ended the day little changed at $ 62.00 a barrel.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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