Forex today: dollar marking out higher territory, key levels in G10's under pressure

Ross J Burland FXStreet

Forex today had the dollar taking out the key 200-D SMA and rallying to as high as 92.5660 and the greenback climbed higher against the G0 circuit and drawing lines in the sand across a number key levels across the board.

As far as economic data went, the US ISM manufacturing index eased 2 points in April to 57.3 and below expectations but, as analysts at Westpac said, "still very lofty with the index hitting 14-year highs as recently as February."

GDP for Canada came in at 0.4% vs 0.3% expected and up from prior -0.1%. Poloz noted the data in his speech overnight who expects sentiment to improve if NAFTA gets resolved.

As for yields, these were less eventful on the US session. The 10's climbed from 2.95% to just 2.96% and the 2's climbed from 2.49% to just 2.50%. Fed fund futures yields price in a 100% chance of a rate hike by June.

As for other currencies, the single unit started out the session around 1.2030 and gave into the bears once again as the US data comes in line with a progressive recovery in the US. The 200-D SMA was broken and the 1.2000 barrier support gave out as stops got run over that took the single currency down to 1.1980 vs the greenback before a bounce to 1.2020 and a close around the figure for the handover.
Sterling was making a four-month low to 1.388 and ended up closing at 1.3620 on a slight give back in the dollar across the board The pair ranged between 1.3588 and 1.3694. The pressures came once again from the UK outlook with data misses that continue to pile in ahead of the MPC meeting on May 10th. The UK PMI was arriving at a 17-month low for April, cutting the odds of a BoE rate hike down again.

As for the cross, it climbed to 0.8822 in late US session and closed up at 0.8814; having traded with a range of between 0.8822-0.8788. Better bid as Central Banks converge.

Stocks on Wall Street were under pressure on Tuesday as investors get set for the FOMC on Wednesday. There were lighter volumes, following a weaker-than-expected ISM manufacturing print, although some losses were retraced later in the session. However, USD/JPY breached 50% of Nov-Mar slide at 109.65 in broad USD advance and continues to eye 110.24 as the 200-DMA.

As for the commodity complex, the reflation trade is continuing to unwind pressuring the antipodeans and the Loonie. Metals are weighing on the Aussie with copper on the way to 3.0000 psychological level, (2.9360 YTD lows). Gold was to YTD lows and WTI was lower to $66.50bbls. AUD/USD started out at 0.7510 in a choppy start in NY, heavy in European trade too. The pair broke below 0.75 and made a low of 0.7472. AUD/USD closed at 0.7488.

Key notes from US session:

Fundawrap: "why is the dollar so strong?"
Wall Street stocks mixed as the USD steals the show

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.