Forex Today: Dollar regains poise amid US jobs blowout, ISM Services PMI highlights Easter Monday

Dhwani Mehta FXStreet

Here is what you need to know on Monday, April 5:

The market mood remains cheerful, as investors bet on faster economic recovery after the US jobs data released Friday blew past expectations. Thin trading conditions, as most major economies observe Easter Monday, keep the sentiment buoyed starting out a fresh week.

A big beat on the US NFP data, President Joe Biden's infrastructure plan and hopes for a vaccine-led recovery raised expectations of a Fed rate hike sooner than previously anticipated. Therefore, the US Treasury yields held onto Friday’s upsurge, with the benchmark 10-year rates around 1.72%.

The S&P 500 futures gain half a percent after the Wall Street indices closed the last week at record highs. The US dollar index regains poise ahead of a subdued trading session while traders await the US Services PMI for fresh trading impetus. The US non-manufacturing sector activity is expected to have expanded at a faster rate in March, with an estimated figure of 58.5.

Across the fx board, resurgent demand for the US dollar has fizzled the recovery attempts in most majors. EUR/USD is back under 1.1750 amid the continued surge in covid cases and restrictions in France, Italy and Germany.

GBP/USD trades pressured towards 1.3800 despite the UK completing vaccinations for 10% of its populations. Traders await Prime Minister Boris Johnson’s confirmation on Monday on a plan, which will allow people to attend public events including sports by either showing proof of vaccination, a recent negative test or antibodies from an infection in the last six months.

Gold feels the pull of gravity amid risk-on mood, higher Treasury yields and the greenback. The precious metal could challenge Thursday’s low at $1705 if the selling pressure intensifies.

WTI Crude Oil is trading below $61 despite Saudi Arabia’s oil-price hike for Asian buyers, as investors assess the implications of the OPEC and allies’ (OPEC) decision to ease the oil output cuts.

Bitcoin is trading well below $60,000, unable to capitalize on more institutional demand. Ethereum is defending the round $2,000 level while Ripple outperforms, having briefly recaptured the $0.70 mark.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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