Forex Today: California dreaming? Markets lean toward easing optimism, shrug off coronavirus concerns

Here is what you need to know on Tuesday, May 5:

The market mood is cautiously optimistic as California announced it will be easing restrictions. The dollar is on the back foot, especially against commodity currencies, and oil is also advancing. A significant hint toward the Non-Farm Payrolls and lifting lockdowns are eyed. 

California leads the way: The western US state's economy is as the size of France's and it is governed by Gavin Newsom, a Democrat, providing hope for that other states will follow. New York is set to follow in mid-May amid improving COVID-19 statistics. Goldman Sachs and Morgan also contributed to the upbeat mood by saying that the global economy has likely bottomed. 

On the other hand, estimates from the Center for Disease Control show US deaths potentially doubling to 134,000 by early June, yet the White House disavowed the report. Senior doctor Anthony Fauci said there is no scientific evidence that the virus was made in a lab, allow politicians to alleviate tensions with China, a factor that previously weighed on markets.

US Factory Orders dropped by over 10% in March, worse than expected, and the focus now shifts to the ISM Non-Manufacturing Purchasing Managers' Index. The forward-looking survey's headline and the employment component serves as a hint toward the Non-Farm Payrolls.

See US ISM Non-Manufacturing PMI Preview: Will April’s statistics reignite the safety trade?

European countries have been easing some of the restrictions amid improving illness statistics with Germany standing out in the past  The EU pledged funds toward finding a vaccine for COVID-19 yet efforts to stimulate the economies via monetary policy come to a legal test. The German Constitutional Court will rule on the previous stimulus by the European Central Ban but will likely avoid rejecting it. Manufacturing PMIs for April have hit crisis or record lows 

UK: As Prime Minister Boris Johnson prepares to make a decision on the lockdown, the Treasury revealed that around a quarter of Britain's workforce is now furloughed at a high cost. Conservatives are urging a return to normal while unions want to ensure workers are protected. The current restrictions expire on May 7, the same day as the Bank of England's decision. Final UK Services PMI is of interest on Tuesday.

The Reserve Bank of Australia left the interest rate unchanged at 0.25%, saying it has scaled down bond-buying activities. However, Governor Phillip Lowe and his colleagues said they could increase the QE program if needed, amid a gloomy outlook for the global economy. 

Australia and New Zealand have refrained from announcing a "safe travel zone" between the countries after holding a joint cabinet meeting. New Zealand reported no new cases for the second day in a row. Both currencies are on the rise. 

Gold continues clinging to $1,700, looking for a new direction ahead of the Non-Farm Payrolls. 

Cryptocurrencies have resumed their rises ahead of Bitcoin's halving event, with the granddaddy of digital assets trading around $9,000.