Forex Today: Market sentiment remains cautious ahead of key US data
|Here is what you need to know on Tuesday, April 26:
Led by impressive gains witnessed in technology shares, Wall Street's main indexes staged a decisive rebound late Monday to close in positive territory. Although the greenback lost its bullish momentum on improving sentiment, it managed to cling to its strong gains. The market mood remains cautious early Tuesday with the Shanghai Composite Index losing more than 1% US stock index futures trading modestly lower on the day. Durable Goods Orders and New Home Sales data for March will be featured in the US economic docket alongside the Conference Board's Consumer Confidence data for April.
Conference Board Consumer Confidence April Preview: Watching as US consumption dwindles.
China has expanded the mass coronavirus testing in Beijing and markets grow increasingly worried about a lockdown that would cause protracted supply-chain issues. Meanwhile, Russia's First Deputy Envoy to the UN said late Monday that there was no point in agreeing to a ceasefire in Ukraine, arguing that Kyiv could use it as an opportunity to make provocations.
EUR/USD dipped below 1.0700 on Monday and failed to stage a meaningful rebound. The Financial Times reported that the European Union was mulling the option of introducing price caps on Russian oil to hit Kremlin's revenues. The pair trades at its lowest level in more than two years below 1.0700 early Tuesday.
GBP/USD dropped to its lowest level since September 2020 below 1.2700 on Monday before recovering toward 1.2750. The British pound is struggling to find demand in the European morning and the pair is, once again, edging lower toward 1.2700.
USD/JPY lost 80 pips on Monday as the Japanese yen capitalized on safe-haven flows throughout the day. The pair is fluctuating in a tight range below 128.00 on Tuesday. The Bank of Japan (BOJ) announced earlier in the day that it will purchase unlimited amounts of 10-year government bonds at 0.25% on April 27 and 28.
Gold fell nearly 2% and closed below $1,900 for the first time since late February on Monday. XAU/USD is having a difficult time gaining traction on Tuesday with the greenback holding its ground.
AUD/USD fell to its lowest level in two months at 0.7135 on Monday. The pair seems to have gone into a consolidation phase below 0.7200 after inching higher earlier in the day. The first-quarter Consumer Price Index (CPI) data from Australia will be released in the early trading hours of the Asian session on Wednesday.
Bitcoin took advantage of the positive shift witnessed in risk sentiment and reclaimed $40,000. Ethereum rose nearly 3% on Monday and was last seen moving sideways near $3,000.
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