Forex Today: Markets remain upbeat despite OPEC+ surprise output cut; RBA next

Matías Salord FXStreet

The OPEC+ shocked markets on Monday, sending crude oil prices sharply higher, but Wall Street kept rallying. On Tuesday, attention will be back on the usual suspects. The Reserve Bank of Australia (RBA) will have its monetary policy meeting, and more inflation numbers are due in the Eurozone with the February Producer Price Index. Markets start getting ready for US employment numbers.

Here is what you need to know on Tuesday, April 4:

A surprise voluntary cut (a million barrels per day off starting in May) from the Organization of the Petroleum Exporting Countries and its allies (OPEC+) boosted sharply crude oil prices at the beginning of the week. The WTI barrel price jumped more than 5%, reaching the highest level since mid-January, above $80.00.

After the decision of the OPEC+, Wall Street indexes reached fresh monthly highs. The Dow Jones gained almost 1%, the S&P 500 rose by 0.37%, but the Nasdaq dropped 0.25%. If crude oil prices continue to increase, it will revive inflation concerns and mount pressure on central banks.

The US Dollar lost ground on Monday, affected by risk appetite and lower US yields on the back of softer-than-expected US Economic data. The ISM Manufacturing PMI came in at 46.3 in March versus the 47.5 expected. The ISM Service PMI and the ADP Employment report are due on Wednesday.

US yields tumbled, with the 10-year dropped to 3.41%, posting the lowest close in a week. The US Dollar Index is hovering around 102.00, looking at March lows. The Japanese Yen benefited from lower yields. USD/JPY reversed from weekly highs, falling to 132.40.

AUD/USD jumped, approaching 0.6800 as the Aussie outperformed. The Reserve Bank of Australia will announce its monetary policy decision. Consensus has changed from a no hike to a 25 basis points rate hike. The decision and the guidance will be relevant for the Australian Dollar.

EUR/USD rebounded sharply from under 1.0800, reaching levels above 1.0900. The area around 1.0930 continues to be the critical resistance. On Tuesday, the Eurozone will release the February Producer Price Index. GBP/USD resumed the upside, and is near the Year-to-Date high above 1.2400.

USD/CHF dropped to 0.9120, while EUR/CHF posted gains on Monday and settled at 0.9950. Switzerland reported inflation with the Consumer Price Index at 2.9% YoY, below the 3.2% of market consensus.

Gold rose more than $30 from the daily lows, finding resistance at $1,990. Silver is moving sideways around $24.00. Cryptocurrencies lost grond; Bitcoin was unable to remain above $28,000. Dogecoin surged more than 35% and then pulled back after Twitter changed the logo to the Doge meme.

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Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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