What you need to know on Monday, May 24:
The greenback recovered on Friday, ending the week mixed across the FX board.
The American appreciated following upbeat US data and comments from Federal Reserve officials suggesting a sooner rather than later discussion on tapering amid signs of heating inflation. On Friday, Atlanta Federal Reserve President Raphael Bostic said that he is worried about inflation getting entrenched, while Philadelphia Fed Patrick Harker noted that the Fed should start discussing tightening. Also, Dallas Federal Reserve Bank President Robert Kaplan reiterated that they are seeing a lot of uncertainty about inflation.
The EUR/USD pair settled at 1.2180, while GBP/USD finished the week at 1.4145, both up against the greenback. AUD/USD posted modest weekly losses, holding above 0.7700 but unable to rally despite soaring gold prices. The bright metal settled at $ 1,881.30 a troy ounce after hitting 1,889.96 mid-week.
UK Prime Minister Boris Johnson said he remains confident the kingdom will continue moving toward full reopening by the end of June, despite the rapid increase of the coronavirus Indian strain. The number of cases of the new variant has more than doubled in a week and may become the dominant strain. Concerns that it may delay opening have put a cap on GBP demand. The UK won’t publish relevant macroeconomic data on Monday.
The Canadian dollar posted modest gains against the greenback, despite oil prices edged lower weekly basis. WTI settled at $ 63.83 a barrel. USD/CAD held near multi-year lows amid encouraging local data.
Wall Street struggled to post gains, despite reports indicating economic progress, as the preliminary May Markit PMIs came in much better than anticipated. Only the DJIA was able to post gains. Meanwhile, US government bond yields held at the lower end of their weekly range. The yield on the 10-year Treasury note settled at 1.62%.
The coronavirus crisis keeps receding in Europe and the US as summer arrives in the northern hemisphere while the immunization campaign continues. The focus is on Latin America and India, where the pandemic is still hitting hard. Developed countries are planning donating vaccines to troubled nations from around the world.
Cryptos collapsed over the weekend, with BTC/USD falling toward $ 33,000.
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.