Forex Today: Can markets find a silver lining? Hong-Kong heightens Sino-US tensions, boosts dollar

Here is what you need to know on Friday, May 22:

The market mood has markedly worsened amid souring Sino-American relations, with worries about Hong Kong serving as the latest trigger. A mix of developments from central banks, data, and the next moves in lockdowns will determine Friday's trading. 

Titans clash: The US and China have been on a collision course for several days, and the straw that broke the camel's back was the news that Beijing is considering significantly limiting freedoms in Hong Kong. The US officials have criticized the move and the financial hub city-state is bracing for protests.

Other developments on that front include China's vow to retaliate for any bipartisan laws scrutinizing Chinese companies listed in the US. The National People's Congress will refrain from setting a growth target amid growing uncertainty. The Communist Party focuses on keeping people at work amid rising unemployment. 

The silver lining is that the world's largest economies both vowed to maintain Phase One of the trade agreement signed in January. That may soothe investors' concerns and change the mood.

US data: A big bulk of US figures published on Thursday was mixed. Weekly unemployment claims came out at 2.483, worse than expected, while Markit's preliminary Purchasing Managers' Indexes for May beat estimates. Existing Home Sales plunged to 4.33 million annualized, within expectations.

GBP/USD remains under pressure amid rising expectations for negative interest rates. Retail sales figures for April will likely show a double-digit plunge (see preview)  Markit's PMIs for May showed a recovery from records lows, but Britain remains in deep contraction. The UK is moving to lower its dependency on Chinese exports. 

The Bank of Japan announced a new loan scheme for small and medium businesses in a special meeting. Governor Haruhiko Kuroda and his colleagues left the interest rate unchanged at -0.10%. Japan is set to ease restrictions in the Tokyo region if infections continue falling. The country previously loosened the lockdowns in other hotspots. 

The European Central Bank's meeting minutes will shed light on the recent decision, where the Governing Council called on governments to do more and pledged to act if necessary. Any hints about upcoming decisions in the June meeting – another €250 billion of bond-buying is eyed – will shake the euro. Eurozone PMIsmostly beat expectations, albeit remained in depressed levels.

Gold is consolidating its losses after suffering a swift sell-off on Thursday and following hitting new 7.5 year highs early in the week.

Oil prices have ended their winning streak and WTI is trading below $32, adding to pressures on the Canadian dollar. The nation publishes retail sales figures for March later on Friday. 

Cryptocurrencies have extended their losses, with Bitcoin struggling to hold onto the $9,000 level. 

More: Negative Rates: Only good for downing currencies?

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

AUD/USD: Bounces off one-week low on Powell-Mnuchin comments, eyes RBA

AUD/USD probes pullback from multi-month high ahead of the key data/events. Fed Chair Powell conveys economic worries, US Treasury Secretary Mnuchin pushes for stimulus. Risks dwindle amid economic fears, uncertainty over the US covid aid package.


Gold: Wobbles near five-month low below $1,800 as Powell, Mnuchin weigh on risks

Gold prices seesaw around $1,77/78 during the early Tuesday morning in Asia. The yellow metal dropped to the lowest since July the previous day before bouncing off $1,764.73. Economic fears, need for stimulus raise bars for the bull’s entry.

Gold news

EUR/USD retreats after its first attempt to break above 1.2000

EUR/USD trades around 1.1940 after failing to break above the psychological threshold. Bulls retain control and would likely challenge the level once again.


Ripple Price Prediction: XRP sits on the verge of an explosive breakout

XRP traded as high as $0.78 on November 24 before a brief period of a correction down to $0.456. Ripple price is trading at $0.655 at the time of writing, notably recovering from the dip and aiming to set higher highs.

Read more

Black Friday 2020 Discounts!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info