In an interview with CNBC on Monday, Atlanta Federal Reserve (Fed) President Raphael Bostic said that inflation is not moving to target as fast as anticipated and reiterated that he leans toward only one rate cut this year because it will take time to understand the impact of tariffs, per Reuters.
Activity data points to softening momentum from Q1, but industrial production has held up. Frontloaded exports and macro policy implementation to continue to support growth in Q2. Property market remains the key drag for the domestic economy.
The Japanese Yen (JPY) extends its winning streak against the US Dollar (USD) into a fifth consecutive day on Monday, with USD/JPY falling below the 145.00 psychological mark to trade near 144.70 during the European session, driven by broad-based USD weakness and fresh hawkish signals from the Bank
The US Dollar (USD) is softer and longer-term yields are higher with the S&P future down 1.0% suggesting the potential for a day of triple selling of US assets that is being driven by the decision of Moodys to downgrade the sovereign rating of the US from the top Aaa rating to Aa1.
The Federal Reserve (Fed) left the interest rate unchanged at 4.25%–4.50% following the May policy meeting, as widely anticipated. In the policy statement, the Fed noted that the economic outlook uncertainty has increased further.
The AUD/USD pair gains sharply to near 0.6450 during European trading hours on Monday. The Aussie pair strengthens as the US Dollar (USD) underperforms after Moody’s downgraded the United States (US) Sovereign credit rating to Aa1 from Aaa in the wake of mounting debt levels.
US Dollar (USD) is expected to trade in a sideways range of 7.1990/7.2190. In the longer run, a breach of 7.2330 would indicate that the likelihood of USD declining to 7.1700 has faded, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
The Chinese yuan remains under pressure as April’s economic data came in softer than expected, reinforcing calls for further policy support to sustain growth, BBH FX analysts report.
US Dollar (USD) could drop below 144.90 against Japanese Yen (JPY); the major support at 144.50 is unlikely to come under threat. In the longer run, USD remains in consolidation, but likely within a tighter range of 144.50/147.30, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
April data confirm hit from trade war escalation last month. Growth momentum expected to pick up again following Geneva truce, but uncertainty remains, ABN AMRO's economist Arjen van Dijkhuizen reports.
Economics normally suffers from a painful deficiency: unlike biologists, physicists, psychologists, and other scientists, economists are generally unable to conduct experiments.
There has been a tentative buildup in upward momentum; NZD is expected to edge higher and test 0.5920. In the longer run, outlook remains mixed, but NZD is likely to trade in a tighter range of 0.5835/0.5985, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Late on Friday, the rating agency Moody's downgraded the US sovereign rating one notch to Aa1, having had the US on a negative outlook for a year, ING's FX analyst Chris Turner notes.
EUR/USD trades 0.85% higher to near 1.1290 during North American trading hours on Monday. The major currency pair strengthens as the US Dollar (USD) underperforms its peers due to erosion in the United States (US) Sovereign Credit Rating.
A breach of 0.6370 would mean that the current price movements are part of a range trading phase, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Gold (XAU/USD) edges higher, trading over 1% on Monday and hits $3,240 at the time of writing, while traders mull three main elements this Monday. Tensions are brewing in the Middle East with Israel embarking on another massive ground offensive.
The Oil market managed a second consecutive week of gains, driven largely by tariff de-escalation. However, the market is in limbo this morning as it weighs what impact, if any, the US credit downgrade by Moody’s Investors Service will have on Oil.
Tomorrow morning, the Reserve Bank of Australia (RBA) will decide on its key interest rate. The market is pricing in a rate cut of 25 basis points to 3.85%.
Not that it is normally a big driver of the euro exchange rate, but the outcome of the Romanian presidential election will be welcome news in Brussels as it prevents a further splintering of the bloc, ING's FX analyst Chris Turner notes.
Euro (EUR) is expected to trade with an upward bias; any advance is likely limited to a test of 1.1225. In the longer run, EUR is likely to consolidate between 1.1100 and 1.1290 for the time being, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
The USD/CAD pair is losing ground after registering gains in the previous session, trading around 1.3950 during the European hours on Monday. The daily chart's technical analysis suggested a sustained bullish sentiment, as the pair continues to trade within the ascending channel pattern.
The Pound Sterling (GBP) trades higher against its major peers at the start of the week. The British currency moves higher ahead of the European Union (EU)-United Kingdom (UK) trade summit in London on Monday.
The US Dollar Index (DXY), which tracks the US Dollar (USD) against a basket of six major currencies, has retraced its recent gains from the previous session and is trading around 100.40 during the Asian hours on Monday.
West Texas Intermediate (WTI) Oil price falls on Monday, early in the European session. WTI trades at $61.57 per barrel, down from Friday’s close at $61.92.
USD/CHF is retreating from gains made in the previous session, trading near 0.8360 during Asian hours on Monday. The decline follows a surprise downgrade of the US government's credit rating, which sparked renewed selling in the US fixed income market.
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