Forex Today: Dollar set to keep falling, pound could be the exception

FXStreet Team FXStreet

What you need to know on Monday, May 9:

The greenback plummeted on Friday, following a poor US Nonfarm Payroll report. The US added just 266K jobs in the month, largely missing the roughly 1 million expected. The unemployment rate increased to 6.1% against the expected slide to 5.8%, while the participation rate increased to 61.7% from 61.5%. Wages rose more than anticipated but at a slower-than-average pace.

Poor US figures somehow reaffirmed the US Federal Reserve ultra-loose monetary policy, sending Wall Street firmly up and government bond yields sharply down. The DJIA and the S&P settled at record highs. US Treasury yields managed to trim intraday losses ahead of the close, with the yield on the benchmark 10-year note settling at 1.57%.

The EUR/USD pair settled at 1.2160, its highest in over two months. Over the weekend, European Commission President Ursula von der Leyen announced that the EU has struck a deal with BioNTech/Pfizer for up to 1.8 billion extra doses of their coronavirus vaccine for 2021-23. The Union aims to have 70% of its adult population covered by July.

GBP/USD flirted with 1.4000 and settled nearby. Still, the pound may suffer from weekend news. The results of the Scottish election were out on Saturday, resulting in a clear victory of Prime Minister Nicola Sturgeon’s SNP party. Sturgeon celebrated the 64 seats won and said that her priority is the pandemic, adding that she still intends to hold an independence referendum once the health crisis is over. Meanwhile, UK producers face significant barriers to EU trade ever since Brexit, with tensions in the fishing sector escalating. The pound may take note of the discouraging headlines at the weekly opening.

Canada also published April employment data on Friday. The country lost 207.1K job positions, while the unemployment rate increased to 8.1%. The numbers were worse than anticipated. The USD/CAD pair extended its slump and finished the week at 1.2124.

AUD/USD settled in the 0.7840 area, helped by soaring equities and higher gold prices. The bright metal settled at $ 1,830 a troy ounce, after reaching 1,843.30.

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FXStreet Team

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EUR/USD trims gains, hovers around 1.1900 post-US data

EUR/USD trades slightly on the back foot around the 1.1900 region in a context dominated by the resurgence of some buying interest around the US Dollar on turnaround Tuesday. Looking at the US docket, Retail Sales disappointed expectations in December, while the ADP 4-Week Average came in at 6.5K.

GBP/USD comes under pressure near 1.3680

The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.

Gold loses some traction, still above $5,000

Gold faces some selling pressure on Tuesday, surrendering part of its recent two-day advance although managing to keep the trade above the $5,000 mark per troy ounce. The daily pullback in the precious metal comes in response to the modest rebound in the US Dollar, while declining US Treasury yields across the curve seem to limit the downside.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.