Forex Today: Dollar the strongest as risk aversion rules

FXStreet Team FXStreet

Here is what you need to know on Monday, April 6th:

Risk aversion leads the way. The coronavirus pandemic continues to take its toll on economic developments, with the US losing 701,000 jobs’ positions in March, much worse than anticipated. The unemployment rate in the country jumped 1 full digit from 3.4% to 4.4%. The final readings of March Services PMI for most major economies suffered downward revisions to record lows.
The US Federal Reserve announced on Friday it would dial back the daily pace of bond-buying to $50 billion a day starting this week, down from the initial buying of $75 billion, a positive sign toward some financial stability.
The coronavirus continues to spread. The US is the epicenter of the pandemic, with over 310,000 cases reported from a global total of 1.22 million. The death toll is at 66,500. At some point, these numbers will become irrelevant, amid the uneven proportion of the tested population in each nation.
The American currency appreciated against its major rivals last week, as it’s still the preferred safe-haven, followed by gold. The US ISM Non-Manufacturing PMI was upbeat in March, printing at 52.5, backing the dollar’s momentum ahead of the close.
The shared currency remains the weakest, while the Pound is the most resilient to the dollar’s demand. The EUR/USD pair is under pressure around 1.0800 while GBP/USD trades below the 1.2300 threshold, at risk of extending its slump.
Commodity-linked currencies ended the week with losses, despite oil and gold settled at weekly highs. Spot gold closed the week at $1,616.20 a troy ounce, while WTI ended at $28.50 a barrel, a two-week high.
Cryptocurrencies spent the weekend consolidating in tight ranges near their recent multi-week highs.

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FXStreet Team

FXStreet

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.