Forex Today: Tapering talks back modest dollar’s gains
|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.
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