Forex Today: Slow start to a busy week

FXStreet Team FXStreet

What you need to know on Monday, May 1st:

The greenback closed the week with losses against most major rivals, hit by dismal US data and relief spurring demand for high-yielding assets triggered by US President Trump speech. Trump said that China broke its word to ensure the autonomy of Hong Kong. As a result, the US administration will begin the process to eliminate policy exemptions that give the region a special treatment. He also announced the end of the country’s relationship with the World Health Organization and announced funds would be redirected to other organizations. He did not mention new tariffs or the end of phase one of the trade deal.

On Saturday, US President Trump said he would postpone a G-7 summit until September, and expand the list of invitees to include Australia, Russia, South Korea and India in a clear move to find support against China. Russia was expelled from the, back then G-8, in 2014 amid the conflict with Ukraine over Crimea. Other G7 members have ever since refused to let the country back in. Meanwhile, an Australian government spokesman said the country would welcome the invitation.

Earlier last week, German’s Chancellor Angela Merkel said on the EU has a “great strategic interest” in maintaining cooperation with China that would remain a top priority. Tensions may surge between the US and Europe over divergent views on China.

The EUR/USD pair settled around 1.1100, finally breaking its range to the upside. The ECB and US Nonfarm Payroll would have a critical rolE this week.

GBP/USD flirted with 1.2400 but retreated and settled around 1.2350. Over the weekend, EU’s chief negotiator Barnier said UK PM Johnson he is failing to honour the withdrawal agreement signed last year, and warned there would not be an “agreement at any cost.” The last round of Brexit talks will take place this week.

Gold closed the week around $1,730 a troy ounce, unchanged weekly basis, underpinned by mounting tensions between the US and China over different issues.

Crude oil prices surged at the end of the week, to close May with substantial gains. WTI settled above $35.00 a barrel, boosted ahead of the close by easing concerns ahead of US Trump’s speech.

Commodity-linked currencies closed the week with gains and near fresh-multi-week highs against the greenback, heading into the new week retaining their bullish stance.

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FXStreet Team

FXStreet

EUR/USD struggles near 1.1850, with all eyes on US CPI data

EUR/USD holds losses while keeping its range near 1.1850 in European trading on Friday. A broadly cautious market environment paired with a steady US Dollar undermines the pair ahead of the critical US CPI data. Meanwhile, the Eurozone Q4 GDP second estimate has little to no impact on the Euro.

GBP/USD recovers above 1.3600, awaits US CPI for fresh impetus

GBP/USD recovers some ground above 1.3600 in the European session on Friday, though it lacks bullish conviction. The US Dollar remains supported amid a softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold remains below $5,000 as US inflation report looms

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains in the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.