Forex Today: The dollar is not ready to change course
What you need to know on Monday, May 31:
Market players are still willing to sell the greenback on upward moves, suggesting the American currency will remain on the backfoot these days. The greenback keeps moving alongside US government bond yields, which reflect US inflation expectations.
Upbeat US data provided temporal support to the USD, on Friday, alongside headlines indicating President Joe Biden would announce a$ 6 trillion spending program. However, the same news boosted stocks, putting a cap on the dollar’s advance.
The EUR/USD pair settled around 1.2200 while GBP/USD closed around 1.4190, both near their highs.
In Europe, European Central Bank policymakers have been utterly cautious on their comments, indicating that they will maintain their ultra-loose monetary policy amid continued uncertainty and low inflation. Contrary to what happens in the US, where inflationary pressures mount and policymakers are open to discuss tightening.
The UK’s massive immunization campaign led to lifting restrictions in the kingdom by steps, with the last one scheduled for June 21. All measures are scheduled to be lifted, and free international travel should resume that day. However, the increasing number of new contagions due to the mentioned strain puts at doubt easing restrictions in three weeks.
Among commodity-linked currencies, the aussie was the weakest, and the CAD remained the strongest. AUD/USD is struggling to retain the 0.7700 threshold while USD/CAD trades below 1.2100. The USD/JPY pair surged to 110.20 but settled below the 110.00 level.
Wall Street managed to post modest gains on Friday, ending the week up. US Treasury yields recovered, but ended the week little changed and at the lower end of their recent range.
Gold continues to outperform. The bright metal settled above 1,900 and is poised to extend its advance. Crude oil prices eased on Friday, with WTI ending the week at $ 66.60 a barrel.
XRP price risk builds to the downside, $0.65 in the crosshairs