Forex Today: Upbeat market’s mood persists
|What you need to know on Thursday, May 4th:
The market remained in risk-on mode on Wednesday, resulting in the dollar losing further. The EUR/USD pair hit a daily high of 1.1251, ending the day nearby. Upbeat US data was only good to boost equities, which in turn, pressured the greenback.
The GBP/USD pair hit 1.2614 but eased from highs amid fears the UK and the EU won’t be able to reach a post-Brexit trade deal. Talks are underway, although no progress has been reported.
Civil unrest in the US continues, although with violence receding. Nevertheless, the tense situation adds to the dollar’s weakeners.
The Bank of Canada left rates unchanged, with Governor Poloz leaving the seat. The statement was optimistic as policymakers believe that coronavirus’ economic impact “appears to have peaked.” The central bank announced it will be reducing the frequency of its term repo operations to once per week, and its program to purchase bankers' acceptances to bi-week operations. The Canadian dollar appreciated further with the news, with USD/CAD piercing 1.3500.
Gold was among the worst performers, losing the 1,7000 mark on the back of risk appetite. Crude oil prices eased from highs, as, despite the OPEC+ is willing to extend its output cuts, members are struggling with compliance.
Market talks suggested that the Trump administration has selected five coronavirus vaccine programs, which would receive additional government funding. Those vaccines are from Moderna, AstraZeneca, Pfizer, Merck, and Johnson & Johnson. The headline boosted the upbeat mood.
Wall Street closed with gains, while US Treasury yields jumped to fresh over two-week highs, reflecting the market’s optimist over economic recoveries.
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