Forex Today: US-Sino tensions dented market’s mood

FXStreet Team FXStreet

What you need to know on Tuesday, May 5th:

Risk aversion led the FX board on Monday, amid mounting tensions between the US and China. US President Trump Trump said that he has strong evidence that the coronavirus originated in a Wuhan lab, although later in the that, the WHO said that it didn’t receive any evidence from the US on the matter. Trump also said that the Asian giant is not complying with the trade deal quotas, and menaced to terminate the phase one. He already threatened the country with new tariffs during the weekend.

The dollar was generally stronger although major pairs remained within familiar levels. EUR/USD eased towards the 1.0900 figure, weighed by a downwardly revised Union’s services PMI and plummeting investors’ sentiment in May.

The pound performed better than the common currency. GBP/USD bounced from 1.2404 to settle around 1.2450. The UK will start trade negotiations with the US this Tuesday.

Japan is in the middle of its golden week, and local markets will remain closed this Tuesday.

Commodity-linked currencies trimmed intraday losses and posted modest gains against the dollar, despite the weak tone of equities. Wall Street bouncing from daily lows and oil’s advance lent support.

Gold prices held on to higher ground, with spot settling just above the $1,700.00 level.

Crude oil prices advanced with WTI ending the day around $21 a barrel, reversing an early decline. Nevertheless, concerns persist as oil producers keep pumping while demand remains subdued amid the ongoing coronavirus crisis.

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EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.