Forex Today: US Dollar extends recovery to start action-packed week

Eren Sengezer FXStreet

Here is what you need to know on Monday, May 1:

Financial markets stay relatively quiet to start the new week after month-end flows ramped up volatility ahead of the weekend. Nevertheless, the US Dollar manages to stay resilient against its rivals early Monday with the US Dollar Index extending its recovery toward 102.00. The trading is action is likely to remain subdued during the first half of the day due to Labor Day holiday. In the American session, the ISM Manufacturing PMI survey for April will be watched closely by investors.

US ISM Manufacturing PMI April Preview: Gloom persists despite expanding US economy.

On Friday, the data from the US showed that the Core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred gauge of inflation, edged lower to 4.6% on a yearly basis in March from 4.7% in April. Moreover, the US Bureau of Labor Statistics reported that the Employment Cost Index, compensation costs for civilian workers, increased by 1.2% in the first quarter, compared to 1% increase recorded in the previous quarter.

Over the weekend, roughly a dozen banks, including PNC Financial Services Group, JPMorgan Chase & Co and Citizens Financial Group Inc, have reportedly submitted bids for first Republic Bank as US regulators are trying to finalize the sale. US stock index futures trade modestly higher on the day following this development and the benchmark 10-year US Treasury bond yield stays below 3.5% despite having retraced a small portion of Friday's decline.

EUR/USD stays under modest bearish pressure and trades near 1.1000 in the European morning on Monday.

GBP/USD reached its highest level since June 2022 at 1.2585 on Friday but struggled to preserve its bullish momentum at the beginning of the week. The pair was last seen trading in negative territory below 1.2550.

Following Friday's impressive rally that was fueled by the Bank of Japan's dovish language, USD/JPY continues to push higher early Monday and was last seen trading at its highest level since early March at 136.80.

AUD/USD has gained traction and advanced toward 0.6650 early Monday. In the Asian trading hours on Tuesday, the Reserve Bank of Australia will announce its policy decision.

Reserve Bank of Australia Preview: No change, nothing new for the Aussie.

Gold price came under renewed selling pressure on Monday and declined to $1,980 area, pressured by recovering US T-bond yields.

Following a quiet weekend, Bitcoin turned south early Monday and was last seen losing more than 2% on the day at around $28,650. After having failed to reclaim $1,900, Ethereum lost its traction and lost more than 1% on Sunday. ETH/USD continues to edge lower toward $1,800 on Monday.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD recedes to daily lows near 1.1850

EUR/USD keeps its bearish momentum well in place, slipping back to the area of 1.1850 to hit daily lows on Monday. The pair’s continuation of the leg lower comes amid decent gains in the US Dollar in a context of scarce volatility and thin trade conditions due to the inactivity in the US markets.

GBP/USD resumes the downtrend, back to the low-1.3600s

GBP/USD rapidly leaves behind Friday’s decent advance, refocusing on the downside and retreating to the 1.3630 region at the beginning of the week. In the meantime, the British Pound is expected to remain under the microscope ahead of the release of the key UK labour market report on Tuesday.

Gold looks inconclusive around $5,000

Gold partially fades Friday’s strong recovery, orbiting around the key $5,000 region per troy ounce in a context of humble gains in the Greenback on Monday. Additing to the vacillating mood, trade conditions remain thin amid the observance of the Presidents Day holiday in the US.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.