Forex Today: US-Sino tensions dented market’s mood

FXStreet Team FXStreet

What you need to know on Tuesday, May 5th:

Risk aversion led the FX board on Monday, amid mounting tensions between the US and China. US President Trump Trump said that he has strong evidence that the coronavirus originated in a Wuhan lab, although later in the that, the WHO said that it didn’t receive any evidence from the US on the matter. Trump also said that the Asian giant is not complying with the trade deal quotas, and menaced to terminate the phase one. He already threatened the country with new tariffs during the weekend.

The dollar was generally stronger although major pairs remained within familiar levels. EUR/USD eased towards the 1.0900 figure, weighed by a downwardly revised Union’s services PMI and plummeting investors’ sentiment in May.

The pound performed better than the common currency. GBP/USD bounced from 1.2404 to settle around 1.2450. The UK will start trade negotiations with the US this Tuesday.

Japan is in the middle of its golden week, and local markets will remain closed this Tuesday.

Commodity-linked currencies trimmed intraday losses and posted modest gains against the dollar, despite the weak tone of equities. Wall Street bouncing from daily lows and oil’s advance lent support.

Gold prices held on to higher ground, with spot settling just above the $1,700.00 level.

Crude oil prices advanced with WTI ending the day around $21 a barrel, reversing an early decline. Nevertheless, concerns persist as oil producers keep pumping while demand remains subdued amid the ongoing coronavirus crisis.

Bitcoin and major altcoins recover from losses; recovery is limited

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

AUD/USD stays weak above 0.6900 after China’s trade data

AUD/USD struggles to capitalize on the previous day’s recovery and stays defensive on the 0.6900 level following the narrowing of trade surplus in China. Increased December Fed rate hike bets allows the US Dollar to pause its decline and weigh on the pair. US CPI data is next of note for the major.

USD/JPY retakes 158.00 on weak Japanese data; focus shifts to US CPI

USD/JPY attracts some dip-buyers and retakes 158.00 in the Asian session on Tuesday as a fall in Japan’s Household Spending offsets hawkish BoJ Summary of Opinions, undermining the Japanese Yen. Moreover, Fed hike bets support the safe-haven US Dollar and the currency pair. The market focus now shifts to the release of the crucial US CPI report.

Gold approaches $4,000 following US inflation data

Gold surrenders a big chunk of Monday’s advance and approaches the key $4,000 mark per troy ounce on Tuesday. The precious metal’s decline follows the solid performance of the US Dollar and rising US Treasury yields after US inflation figures.

Pi Network rebounds from record lows, exits oversold territory as momentum improves

Pi Network (PI) shows a strong recovery on Tuesday, up over 7% after recording its all-time low of $0.0624 the previous day. PI token’s appeal in the derivatives market shows minor improvement, with Open Interest rising to $6.21 million.

Five risks for the global economy in 2027

From AI bubbles to geopolitical breakthroughs, these are some of the five ways why this outlook could go wrong – or right: A severe correction in US stocks triggered by an AI meltdown, second-round inflation effects emerge at scale or geopolitical de-escalation delivers an energy peace dividend.

Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds

Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.