Forex today was mainly driven by the Euro rebound from half-year troughs, as the EUR bulls were rescued by the Italian politics. The rejection of the Eurosceptic Italian Economy Minister and the resultant failure to form the coalition government turned out to be EUR supportive. Subsequently, the US dollar was aggressively sold-off across the board, offering some lift to most majors while easing US-North Korea risks also boosted the sentiment around the Antipodeans.
However, USD/JPY traded listlessly around 109.40 levels amid a lack of fresh catalysts and cautious ahead of the key US jobs data due later this week. The Asian markets also failed to benefit from easing geopolitical tensions, as tumbling oil prices, in the wake of potential output ramp up, dragged the energy and resources stocks lower on the indices. Meanwhile, gold prices on Comex consolidated in a tight range below the $ 1300 mark heading into holiday-thinned trading.
Main topics in Asia
Italy's attempt to form government fails as President sides with the Euro - Reuters
US-North Korea summit preparations are moving forward - Reuters
UK's Boris Johnson calls for Britain to leave EU customs union - The Telegraph
UK's preparations for a 'no-deal Brexit' have come to a halt - Financial Times
Moody's places Italy on downgrade watch, Baa2 rating threatened
Oil on the way down again, WTI hits $66.00 as production increases scuttle the bull trend
PBOC hikes 28-day reverse repo rates by 5 bps
N Korean delegates head for Singapore today - Yonhap
Asia stocks middle on the week, Japan's Nikkei 225 gaps into ¥22,500.00
Key Focus ahead
It’s a holiday-thinned light trading session today for the traders, as the UK and US observe the Spring Day and Memorial Day holiday respectively. Hence, markets will be left at the mercy of illiquid trades and developments surrounding the Italian politics while any latest updates on the US – North Korea Summit could also have a significant bearing on the US dollar trades, as the main focus remains on this Friday’s US non-farm payrolls release for fresh outlook on the US interest rates.
In the meantime, we have a second-liner Swiss employment data due for release today at 0715 GMT, which will offer some incentives to the investors. Also, the oil-price action and risk trends will play a key role heading into a quiet trading session.
EUR/USD looks to extend the bounce above 1.1700, Italian politics in focus
The EUR/USD pair opened the NFP week with a bullish gap of 35-pips and extended the rebound from six-month lows of 1.1646 well above the 1.1700 levels on the back of weekend’s news that the attempts at forming a coalition between the Five Star Movement and League have failed.
GBP/USD dovetailing into 1.33 as Sterling eyes a thin week
The UK is on holidays for Monday for the Spring Bank Holiday, pulling a long weekend and giving the new trading week a quiet start. The first macro release for the UK won't be hitting until late Wednesday.
Buckle in for an action-packed holiday-shortened week
Buckle in for an action-packed holiday-shortened week brimmed with essential events, none more significant than the May employment report particularly in light of the recent dovish conversation on wage growth in the May 2 FOMC minutes.
The week ahead: eyes turn to nonfarm payrolls - Nomura
Analysts at Nomura highlight the key scheduled data events for the week ahead.
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
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.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.